Coal-to-power focused junior, African Energy Resources says the $3 million forms part of the agreement with First Quantum Minerals (FQM) first announced in January 2015.
Additionally, a 12-month extension, to 12 July 2017, has been agreed for the investment of the remaining $7 million required to complete FQM’s earn-in for 75% interest in the Sese joint venture.
The $3 million commitment will commence immediately and involves a number of activities:
This includes additional large diameter drilling to collect approximately 1 000 kg of coal for combustion testing and physical handling test work.
This will lead to the development of the fuel specification for the proposed power station, and finalisation of the coal handling and processing flow sheet.
FQM will undertake preliminary geotechnical evaluations of the proposed power station site to assess sub-surface conditions with respect to footings for the power station (boilers, turbines, generators) and ancillary infrastructure.
The company will update the environmental approvals to allow up to 450 MW of power generation (staged development of 2 x 225 MW units) and the associated coal mining and processing.
It also commits to execute the water supply agreement and complete preliminary power station design and layout for the Sese power project.
In addition, the company plans to negotiate for power offtake agreements with interested parties and take hydrogeological studies at the mine site to characterise aquifers to allow mine design and aquifer management plans to be advanced.
The commencement of early site works will include an upgraded access road and preliminary siting of camp facilities, whilst the diamond drilling will test the continuity and quality of the Seswe limestone deposit for use as a sorbent to reduce airborne sulphur emissions from the proposed power station.
Overview of Sese power project
The Sese integrated power project comprises a power station complex with its own captive coal mine.
The Sese coal licence contains 5 Bt of low strip ratio coal providing significant potential for expansion of generation capacity.
The initial development concept is centered on an initial 300 MW power station (2 x 150 MW CFB boilers) with a captive 1.5 Mtpa coal mine.
Additional 300 MW developments are proposed as capacity is contracted.
The FQM joint venture agreement provides African Energy Resources with a development partner for Sese with a strong track record in developing large-scale capital projects and it also provides a sound financial partner who is responsible for providing the necessary funding for the project development.