A second phase study for the coal mine at its Mbeya thermal power project in Tanzania has improved on the original concept in key areas, Kibo Mining (LON:KIBO) said.
Louis Coetzee, chief executive, said the results for the coal mine element of the power project had surpassed all expectations.
In particular, the all-in cost margin improved to between 49% - 62%, from 38% - 45%, and compares with the 25% usually considered "healthy" for this type of project.
The net present value range is now between US$244mln – US$211mln, with a payback period of up to three and a half years.
Coetzee added that the report also delivered decisive results on technical and environmental issues, with a diversion of the local river envisaged in the concept study now seen as unnecessary.
"The continuous surface miner proved to be a viable option, which improved mining efficiency and effectiveness significantly and so did the fact that the overburden could be mined by using 'free digging'."
A continuous surface miner makes any washing of coal unnecessary, while "free digging" avoids blasting.
“The avoidance of any washing frees the project of a very expensive and onerous environmental liability," Coetzee added.
"The fact that we also do not have to do any river diversion is a further significant positive environmental impact".
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