Modern Mining October 2015

feature COAL MINING Drilling at the Mbeya Coal to Power Project site in Tanzania (photo: Kibo Mining).

Optimisation study strengthens case for Tanzanian coal project

Kibo Mining, the Tanzania focused mineral exploration and development company listed on London’s AIM and Johan- nesburg’s AltX, has announced what it describes as “signifi- cantly improved financials” for the coal mine component of its Mbeya Coal to Power Project (MCPP). The company and its advisers, South Africa’s Minxcon Projects, have now completed a financial optimisation study for the MCPP coal mine, based on feasibility results received to date.

300 MW capacity (probably using Circulating Fluidised Bed technology). It believes there would a ready market for the electricity gen- erated by the project, given that Tanzania’s national installed generation capacity is 1 500 MW (with only 780 MW operational) while demand is currently in the range of 1 500 to 1 800 MW and expected to grow by at least 10 % per annum over the next several years. The project received a boost earlier this year with the signing of a ‘Joint Development Agreement’ which will see Kibo collaborating with SEPCOIII, a China-based EPC contractor specialising in the construction of power plants. SEPCOIII has an impressive track record, hav- ing installed 37 000 MW of generating capacity since being founded in the mid-1980s. It is estimated that the power station component of the MCPP could cost between US$640 and US$760 million to develop, depending on the plant configuration adopted. The findings of a Pre-feasibility Study (PFS) – part of the overall DFMS – on the mine were released in August this year. The project was assessed for a 28-year mine life, with an annual average coal production of 1,48 Mt over the life of mine. The PFS identifies the preferred mining method as modified terrace mining, with over-burden removal by means of a free dig (truck and shove) method and coal seam and inter-burden mining by means of the mechanised continuous surface mining method. According to the PFS, only limited processing in the form of destoning of the product would be required, as the surface miners would ensure the delivery of coal on specification to the power station, with no need for crushing and washing. In addition, a river diversion which was identified in the Concept Study as being needed has proven unnecessary in the PFS pit optimisation. The PFS estimates the capital cost at between US$38 million and US$73 million depending on the development options chosen. The mine would generate annual estimated coal sales of between US$48,4 million and US$48,6 million. In the latest financial optimisation study for the MCPP coal mine, the impact

T he Mbeya (previously Rukwa) coal project comprises 16 tenements located in south-western Tanza- nia. What is known as the Central Block contains the 109 Mt Mbeya thermal coal mineral resource and will host the MCPP. The Central Block covers 1 873 km 2 and is situated approximately 70 km north- west of the regional town of Mbeya and just south of Lake Rukwa. Kibo, which also has gold projects in Tanzania as well as the Haneti project, pro- spective for nickel, PGMs and gold, launched a Definitive Mine Feasibility Study (DFMS) on Mbeya in the second half of last year. The com- pany is planning an open-pit mine at Mbeya allied to a ‘mine mouth’ power station of 250 to

38  MODERN MINING  October 2015