Ncondezi Energy Ltd (LON:NCCL) is progressing towards “key” contracts after strategic partner China Machinery Engineering Corporation (CMEC) completed a site visit to its coal-power project in Mozambique.
The whole project will eventually see six 300-megawatt coal-fired power stations fed by the Ncondezi coal mine, which holds a 4.7bn JORC coal resource.
The company is targeting the engineering, procurement and construction (EPC) and operation and maintenance (O&M) contracts for the fourth quarter, with the purpose of finalising the power tariff to submit to state power utility Electricidade de Moçambique (EDM).
CMEC's site visit was to complete technical due diligence, including travel to the proposed location of the key components of the power plant, mine and water infrastructure, as well as visits to the nearby operating coal mines and construction quarries.
“These proposed contracts will provide firm capital expenditure and operating expense numbers for the project financial model and electricity tariff proposal, required by EDM to demonstrate the proposed project tariff is both credible and attractive,” said chief executive Hanno Pengilly.
He said the site visit and technical question-and-answer sessions with CMEC were “successful” and that Ncondezi's internal due diligence team is “now focused on addressing outstanding questions” to finalise the EPC and O&M process within the fourth-quarter timeframe.