HomeEast AfricaTanzania power requirements drive Kibo Mining's Mbeya project forward

Tanzania power requirements drive Kibo Mining’s Mbeya project forward

Kibo Mining (Kibo) is pushing forward with the development of its MCPP which is due to produce first coal within the next few years.

Tanzania currently has less than 1 000 MW of operational power – out of the 2 000 MW it requires.

With a projected GDP growth rate of 7% per year in the medium term (according to the International Monetary Fund), it is facing increasing power generation under-capacity to meet its economic development needs.

Kibo CEO Louis Coetzee comments that Kibo has maintained its positive working relationship with the Tanzanian government at local, regional and national levels as well as all communities in close proximity to the project to ensure the project continues to advance forward.

“Kibo recognises the potential to enhance the quality of life and opportunity for Tanzanian citizens through careful development of its projects,” he continues.

Kibo has to date made significant progress in winning financial, government and other key stakeholder support for the MCPP.

The MCPP is now part of the Tanzanian government’s National Energy Strategy and it has committed to support development of the infrastructure in southern Tanzania to enable the project to proceed.

MCPP status update

Kibo is undertaking the twin track development for the MCPP, comprising a coal mine which will comfortably feed a 300 MW mouth-of-mine thermal power plant for 32 years.

The Mbeya coal deposit extends across two prospecting licences and is divided into six blocks based on geology and location. The defined resource is located within the Muasa and Kanga blocks which have been extensively explored to date.

Kibo has completed a coal mining definitive feasibility study and a power pre-feasibility study for the project and has recently announced the completion of an integrated bankable feasibility study report for the project that includes an integrated financial model.

The engineering, procurement and construction (EPC) (power) contractual work has been divided into two lots: lot 1, the power station EPC contract and lot 2, the power line construction EPC contract.

Lot 1 was awarded conditionally to Chinese electricity power construction corporation SEPCO III during December 2016 with lot 2 to be finalised subject to concluding a comprehensive line study.

Following completion of various technical studies related to the transmission line, most notably an in–country line reconnaissance and survey, a final bid was prepared and submitted to Kibo by SEPCO III.

The company recently concluded the final bid clarification for the construction of the transmission line that will deliver power from the Mbeya power plant to the TANESCO-owned Mbeya sub-station. TANESCO is Tanzania’s state-owned utility company.

Kibo also announced in September 2017 that it is near concluding a power purchase agreement (PPA), as well as securing project financing for its MCPP.

Coetzee states that a memorandum of understanding (MoU), as a precursor to a final PPA with TANESCO, has passed all the relevant legislative stages and is awaiting final confirmation from Tanzania’s Attorney General.

“Once signed, the MoU will provide a fixed framework within which the fundamental commercial and technical components of the PPA will be negotiated and agreed.”

“With the final negotiation of the PPA approaching, full feasibility studies complete and development finance on its way to being secured, this nationally significant project is reaching a tipping point that I believe will see stakeholders rewarded,” says Coetzee.

Environmental authorisation

Shangoni Management Services in conjunction with MTL Consulting Company was appointed by Kibo Mining to assist in the process of obtaining environmental authorisation for the MCPP.

Shangoni undertook several tasks for the successful completion and submission of the final ESIA documents (for approval and environmental certification), including -:

  • Project management
  • Appointment and management of sub-contractors
  • Review of the scoping reports and Environmental and Social Impact Assessment (ESIA) reports
  • Specialist assessments: geohydrological assessment, hydrological assessment and atmospheric impact assessment; rehabilitation and closure plan, financial provision calculation and
  • Environmental-technical advice