30 August 2013 – The Mozambican government has granted London-based Ncondezi Energy’s 100% held Mozambican subsidiary, Ncondezi Coal Company Mozambique Limitada, a mining concession for its integrated coal mine and power station project.
Under the concession, the company will have exclusive rights to mine the Ncondezi coal deposit for 25 years. The concession is in Moatize district, in the western province of Tete, and covers an area of 25,138 hectares.
The Company is developing an integrated thermal coal mine and power plant in 300MW phases up to 1,800MW, and first production is planned for 2017. The first 300MW phase is targeting domestic consumption in Mozambique, using existing transmission capacity to meet current demand.
Unlike the other mining companies operating in Tete, Ncondezi’s priority is not high quality coking coal for export. Instead it is concentrating on thermal coal for local power demand. Production of export thermal coal will be considered only when the required third-party rail and port infrastructure is in place.
Ncondezi has also concluded an addendum to its Mine Framework Agreement with the Ministry of Mineral Resources. This, the Wednesday release adds, now states that the public Mozambican Mining Exploration Company “will be granted a 5% free carry in shares of Ncondezi until the start of the mine’s construction”.
Ncondezi is also obliged to set aside a statutory 5% equity participation for the Mozambican public at commercial market terms and spend at least five million US dollars on social development programmes.
Cited in the release, the company’s Chief Executive Officer, Paul Venter, said: “The issuance of the mining concession marks a very important and significant step forward for the Ncondezi project. It secures the coal fuel supply for the power project, which materially increases the bankability of the Ncondezi project, and also fulfils one of the key conditions precedents to the Power Framework Agreement”.
The other conditions are agreements with the Mozambican electricity company, EDM, on purchasing the Ncondezi power, and on the construction of transmission lines. Venter said that these agreements “are in the final stages of negotiation and on track for signing by the fourth quarter of 2013.”
Source: allAfrica.com. For more information, click here.