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July 2016
MODERN MINING
31
COAL
A
IM-listed Kibo Mining reports the comple-
tion of a positive Mining Definitive Feasi-
bility Study (MDFS) for its flagship Mbeya
Coal to Power Project (MCPP) in Tanzania.
The project involves the development
of the Mbeya coal mine and an associated mine-mouth
power station of 300 MW capacity.
The MDFS comprises the optimisation of the mine
design, a detailed mine design based on the results
from the restated Mbeya coal resource and the final coal
requirement for the Mbeya Power Station as stated in the
Power Definitive Feasibility Study (PDFS).
According to Kibo, results from the MDFS correlate
accurately with those of the Mining Pre-Feasibility Study
(MPFS), whose results were announced last year, and
have reconfirmed the Mbeya coal mine as a robust project
with strong financial and commercial indicators.
Key results from the MDFS are the following: an IRR of
69,2 % (a 15 % improvement from the 53,9 % stated in the
MPFS); a payback period of 2,4 years (a 7 % improvement
from the 2,6 years stated in the MPFS); and a peak funding
requirement of US$17 million (reduced by 54 % from that
identified in the MPFS).
The MDFS also delivers a reduction of 23 % in the
power station coal requirement over the life of the plant
compared to that in the MPFS, bringing about significant
environmental and cost benefits. Explaining this point,
Kibo says the MDFS mining method has made it possible to
design a power station that requires significantly less coal
for the same output – i.e. 1 840 GWh per annum. Although
this will result in a linear reduction of revenue for the coal
mine, this is more than recovered in cost savings for the
power plant which is most sensitive to fuel costs.
The mining method to be adopted at Mbeya is modi-
fied terrace mining, with overburden removal by means
of a free dig (truck and shovel) method and coal seam and
interburden mining by means of mechanised continuous
surface mining.
“We are delighted with the results of the MDFS, which
have confirmed, and in various areas improved on, the
positive Pre-Feasibility Study results. Figures from the
MDFS report confirm that the Mbeya coal mine (as the
mining component of the MCPP) is a robust project in
every aspect. Project fundamentals are significantly better
than originally at the end of the Concept Study in 2014,”
says Louis Coetzee, CEO of Kibo Mining.
“We are particularly pleased with the improved IRR
of 69,2 % and the significantly improved environmen-
tal impact. The significance of the mining method that
was developed for the Mbeya coal mine cannot be under-
estimated. This method not only eliminated one of the
two biggest environmental risks for the MCPP, i.e. elimi-
nating the need to wash the coal, but also reduced the
coal requirement by 23 %, which means substantial
cost savings for both the mine and the power plant. It
will also result in a corresponding reduction in emissions.
Considering that these two elements are fundamental to the
fundability of the MCPP, we could not have hoped for better
results from the MDFS.
“The total coal requirement of the Mbeya power plant
over the life of plant is stated as a probable reserve in the
MDFS, meaning that the power plant can rely on an upfront
guaranteed fuel supply for its entire life span.”
Coetzee adds that with the two key work streams required
for the completion of the MCPP Integrated Bankable
Feasibility Study (IBFS) in place, Kibo is now focused on
completion of the final work on the IBFS.
The Mbeya (previously Rukwa) coal project comprises
22 tenements located in south-western Tanzania. What is
known as the Central Block contains the 120,8 Mt Mbeya
thermal coal mineral resource and will host the MCPP. The
Central Block covers approximately 2 000 km
2
and is situ-
ated approximately 70 km north-west of the regional town
of Mbeya and just south of Lake Rukwa. It is strategically
located close to Mtwara Development Corridor earmarked
for rapid socio-economic development by the Tanzanian
government
The project received a significant boost in April 2015 with
the signing of a Joint Development Agreement (JDA) with
China-based EPC contractor SEPCO III.
Study confirms Mbeya
as a “robust project”