Kibo Mining (LON:KIBO) says it has made good progress in discussions with Tanzania’s state power group over a deal for electricity generated from the Mbeya coal-fired power project.
“We have every reason to believe that we will be able to conclude the MOU in the very near future and that we will complete all remaining feasibility work on time and in doing so also deliver the Bankable Feasibility Study for the integrated MCPP on schedule," said Louis Coetzee, Kibo’s chief executive.
Kibo and the Tanzania Electric Supply Company (Tanesco) have been in talks for a year over a Power Purchase Agreement (PPA) for Mbeya.
The principles agreed will be incorporated in an official MOU with Tanesco that will serve as the reference framework to finalise a PPA for the project.
Coetzee added: "The MCPP [Mbeya] continues to make significant progress, with this latest breakthrough being one of the most important milestones in the development of the MCPP to date.
“Finalising critical commercial arrangements on the MCPP, to ensure optimal value creation and realization on the company's flagship asset, is crucial at this stage of the project's development.”
Technical feasibility work is also advancing rapidly, he added.
Kibo plans to build a 250-350MW mouth-of-mine thermal coal power plant at Mbeya to be powered by the thermal coal deposit at Rukwa.