logo-loader

Kibo Mining hails better than expected economics of Tanzania coal mine

Published: 18:12 09 Oct 2014 AEDT

coal_in_boxcars_350_543636825274b

Kibo Mining (LON:KIBO) said economics of the mine portion of the Rukwa coal to power project in Tanzania are better than initially expected.

Pencilling in a little more detail, it revealed the capital costs of the project were thus far below estimates, giving a shorter payback period, while the rate of return is described as “attractive”.

Meanwhile, deployment of continuous surface mining technology will lead to fast, precision mining of the coal seam and a reduction in crushing requirements and costs. Direct mining costs are put at US$1.60-$1.90 a tonne.

Chief executive Louis Coetzee said: "The initial robust economics of the Rukwa coal mine are better than expected and bode well for the remaining feasibility work.

“The results obtained from feasibility work done so far will now be subjected to further rigorous interrogation during the ensuing, more advanced, stages of the feasibility study.

“Incorporating specific requirements and specifications from the power feasibility study will further refine the economic assessment of the Rukwa coal mine."

Located close to Lake Rukwa, the power project has an abundant water supply as well as being blessed with extensive road and rail infrastructure.

The national grid is just 20km away, while the southern city of Mbeya provides a ready market for the electricity.

The figures reveal Tanzania is struggling to keep pace with its energy needs. It requires around 2,000 megawatts, has an installed base of 1,500, of which just over half is operational.

No wonder, then, the authorities were so keen to bring Rukwa into the strategic energy plan.

The definitive feasibility study for the mine and the preliminary study for the power station are set to be complete in the second quarter of next year.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

12 hours, 15 minutes ago