The flagship Mbeya thermal power station project in Tanzania is ready to go once a power purchase agreement (PPA) can be agreed with the country’s electricity company.
Katoro, the company’s gold assets, were spun out in May with a separate listing, while in November it acquired a power station development in Botswana to leverage the knowledge acquired from Mbeya.
The group picked up an 85% stake in Mabesekwa from Sechaba, a subsidiary of Shumba Energy, for about £9mln to be paid in shares.
Mbeya the flagship
Mbeya is Kibo’s flagship asset. The plan is to develop the Mbeya coal mine as a 1.5mln tonne operation based on a defined 120.8 mln tonne resource and the Mbeya Power Plant as a 300MW mine-mouth power station with leeway for this capacity eventually to double.
Tanzania, and the wider East African region, are acutely short of power and the project has received strong support from both the government and international companies.
The Tanzanian Government has targeted the delivery of 5GW installed generation capacity by 2020 with a further 7GW to be added in the following five years.
The project through is being held up by negotiations over the PPA.
In January, Kibo said that “significant progress” had been made towards the expedited PPA.
The PPA – which is essentially the Tanzanian government and TANESCO agreeing to buy the power in advance – is needed for Kibo to complete the financing for the project.
Once that is in hand, the AIM-listed firm believes it can get the MCPP into production within 36 months.
Potential at Katoro Gold
At Katoro, a Light Detection and Ranging (LiDAR) survey at the Imweru gold project was completed at the end of the year, with the data to be to support the final resource estimation and optimised mine design.
Louis Coetzee, executive chairman, said: "We are fast-tracking the work programme at Imweru and delighted with the speed at which it is progressing.
"As we move into 2018, we anticipate a steady flow of news as we hit key trigger points including the completion of the PFS, drilling programme, a feasibility study and the application for a Mining Licence as well as the final phase of the Environmental and Social Impact Assessment."
Mabesekwa a ‘fantastic opportunity’
Like Mbeya, Mabesekwa will be a power plant based on coal produced from a resource at the site.
The project will utilise 300Mt of the existing 777Mt coal resource.
Coetzee described it as a "fantastic opportunity" especially as it was located in Botswana.
“The synergies with our flagship MCPP [Mbeya] project in Tanzania are impossible to ignore, placing us in a strong position to utilise our knowledge and contacts to rapidly advance both projects to production in a short time-frame.”
At 6p, Kibo is valued at £22mln.