Kibo Mining PLC (LON:KIBO) has redrawn its agreement with Chinese partner SEPCO for the construction of the power plant at the Mbeya coal/electricity project in Tanzania.
In return for the right to be the sole bidder, SEPCO will refund Kibo 50% of the development costs incurred starting with US$1.8mln by end August.
Agreement over the remainder of the costs and payment date must be reached by 22 September, Kibo said.
SEPCO will also not have an equity stake in the project going forward.
Louis Coetzee, Kibo’s chief executive, said he was extremely pleased with the new agreement.
“The company continues to hold a 100% interest in the MCPP [Mbeya Coal and Power Project] and [the agreement] still leaves Kibo with full and absolute control over the further development of the project.”
The cash refund will help it with further development of the MCPP, while the new agreement recognises the increased value of the project following completion of the mining and power Definitive Feasibility Studies.
The agreement will also significantly strengthen Kibo's position in the negotiations of the power purchase agreement for the project, said Coetzee.