Bushveld Minerals CEO Fortune Mojapelo
Aim-listed Bushveld Minerals, parent company of coal and energy company Lemur Holdings, on Wednesday announced that the Imaloto project is on track to deliver electricity to south-western Madagascar by 2021.
The Imaloto project is a developing integrated thermal coal mining and independent power project in Madagascar.
As at the end of the third quarter, the social- and environmental-impact assessment (Seia) fieldwork is still ongoing, with more than 50% of the community engagement completed.
Additionally, the integrated primary vanadium producer stated that the Seia’s terms of reference were submitted to Madagascar’s Ministry of Environment, and that connection and transmission agreements were signed with State-utility Jiro sy Rano Malagasy, or Jirama, in the third quarter.
The Seia fieldwork is on track and is expected to be completed in the fourth quarter. However, Lemur has made an allowance to conduct specialised studies to include rainy season impact scenarios, which may extend the completion of the technical Seia studies in the first quarter of 2019.
A joint review and finalisation of the bankable feasibility study (BFS) was submitted by Lemur’s technical development partner, Sinohydro, in June and is still ongoing.
Some of the key expected outputs of the mine BFS include a detailed mine plan and the economic techno-financial model.
Both the power plant and the mine’s BFS are critical considerations for lenders to assess the viability of the Imaloto project, the company explained, stating that, once the BFS studies are completed, Lemur will proceed to the engineering, procurement and construction (EPC) discussions, which will be a key focus area for the remainder of this year.
The coal mine BFS was, in the interim, initiated and is expected to be completed in the upcoming quarter.
The BFS and Seia studies have been Bushveld’s key focus areas in the third quarter, said Lemur CEO Prince Nyati.
Notwithstanding, he said the transmission and connection agreement with Jirama was concluded.
“This is a significant development because the agreement not only addresses the critical aspects of how independent power producers will connect to the Jirama network, but it also provides clarity on the link between the provisions of the concession agreement and the power purchase agreement,” he said.
Lemur’s focus for the remainder of this year is to complete both the mine and power BFS studies, which the company expects to finalise in the fourth quarter.
“We will also be progressing project funding discussions and related due diligence activities as well as initiating EPC discussions.”
Lemur has also received an expression of interest for baseload power offtake from a global mining company in the Imaloto supply catchment area.
Meanwhile, the company continues engaging with lenders for the construction phase of the Imaloto power project.
Lemur has also received an offer for the project preparation finance from a regional development finance institution, which is subject to due diligence.
A financial model development, which is subject to the finalisation of the BFS, was also completed in the period.
“We are pleased with the progress being made on the Imaloto project, especially with respect to securing institutional lenders for the construction phase of the project, with a number of the lenders concluding the initial due diligence on the project.
“We expect to advance discussions on terms of lending after the BFS is completed in the fourth quarter,” Bushveld CEO Fortune Mojapelo commented.
He added that Bushveld remains committed to delivering on the value of the Imaloto project by ensuring that all key milestones are achieved according to schedule.
In turn, this positions the project favourably for the various strategic options the company is considering to ensure Lemur continues to receive the focussed attention needed in terms of human resources and capital requirements in order to reach financial close, and ultimately deliver much-needed electricity to Madagascar while unlocking value for Bushveld shareholders, he elaborated.