(2016-01-13) The London based company Ncondezi Energy announced on Monday that it has signed a binding Joint Development Agreement with Shanghai Electric Power Company to develop the Ncondezi power project in the western Mozambican province of Tete.
Under the agreement Shanghai Electric Power Company will become the controlling shareholder in a new 300 megawatt coal-fired power station. It will invest up to US$25.5 million and receive a 60 percent share in the power project.
Ncondezi Energy will retain full ownership of the coal mine, which will be financed and developed separately to the power project.
Unlike neighbouring coal projects, Ncondezi is focussed on meeting Mozambican demand for electricity, using its own thermal coal. It is thus, unlike other mining companies in Tete, not dependent on rail and port infrastructure to move coal to ports for exports. “The first 300MW phase is targeting domestic consumption in Mozambique using reinforced existing transmission capacity to meet current demand,” reads the comany’s press release, posted on its website (ncondeziernergy.com).
Ncondezi’s coal mine will be an open cast operation with a target output of 1.3 million tonnes per annum. In the first stage of the power project, 300 megawatts of electricity will be produced. However, Ncondezi plans to expand this in stages to 1,800 megawatts.
The power plant is to be built near the mine and approximately 95 kilometres from the national grid’s power transmission line leading from the Cahora Bassa Hydroelectric Dam.
Ncondezi Power Project (NPC) will pay an additional US$35 million on initial draw down of funds after Financial Close of the Power Project.
Based on SEP’s expertise in coal fired power generation, the power pant’s boiler technology will change from Circulating Fluidized-Bed to Pulverized Coal.
The Ncondezi Coal Company mine is located around 25 kilometres from the Sena railroad, which ends at the town of Moatize, and two types of thermal coal will be mined there that are considered to be ideal for Asian markets and are comparable to international benchmark types of coal, such as Newcastle high ash Australian coal and Shanxi blended coal from China.
The Shanghai Electric Power Company Limited is a listed on the Shanghai Stock Exchange and is majority-owned by the China Power Investment Corporation, one of the biggest in the industry in China with a power production capacity of 90,000 megawatts.
Source: AIM / Macauhub /ncondezienergy.com
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