Tanzania – Kibo Mining has engaged Tractebel Engineering, a 100% subsidiary of Engie (formerly GDF Suez), to conduct the definitive feasibility study for the Mbeya coal-to-power-project (MCPP) power component.
It will also deliver any additional work, inclusive of the role as owners engineer, which the company and Tractebel may agree upon for subsequent development phases of the project.
“The appointment of Tractebel marks a major strategic breakthrough in the development of the MCPP. Tractebel has one of the best international reputations for the development and construction of power facilities like the MCPP,” says Kibo Mining CEO Louis Coetzee.
“The commercial terms on which Tractebel was engaged will furthermore relieve pressure on Kibo’s short-term cash flow requirements and funding needs substantially.”
“This will in turn potentially enable Kibo to complete the definitive feasibility studies for both the mine and the power plant and to advance the MCPP up to bankable feasibility study (BFS) without the need to give away any of Kibo’s equity in the MCPP, of which the company still owns 100%.”
“The appointment of Tractebel also completes the process of providing Kibo with adequate capacity to develop, construct and commission the MCPP. The MCPP now has the benefit of reputable capabilities in the form of MinXcon to complete mining feasibility work, Tractebel to complete the feasibility studies on the power plant, SEPCO III as preferred EPC contractor and Standard Bank as financial advisor.”
Tractebel was contractually engaged by Kibo to conduct the MCPP DPFS and to continue thereafter as owner’s engineer during subsequent development stages of the MCPP power component. The agreement followed a period of negotiations during which Tractebel demonstrated a very keen understanding of the challenges that Kibo is facing at this stage of the development of the MCPP.
It was subsequently possible to engage with Tractebel on a basis where all Kibo’s technical, operational and financial priorities were met satisfactorily. 55% of the cost associated with the work on the DPFS will only be payable after completion of the feasibility study, of which a substantial part will only be payable near / at the time when the MCPP reaches financial close, which Kibo considers to be to its commercial benefit.
Work on the DPFS will commence immediately and the appointment of Tractebel to conduct the DPFS will happen within the framework of a broader co-operation agreement between Tractebel and Kibo which extends beyond the scope of the DPFS and the development and construction phases of the MCPP.
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