Coal mining awaits Tanesco nod

Dar es Salaam. Kibo Mining has discovered huge coal deposits in Mbeya and is preparing itself for production.

It is negotiating with the Tanzania Electric Supply Company for power production and sale,” the deputy commissioner for minerals, Mr Ally Samaje said.

Mr Samaje told BusinessWeek recently that the government was also waiting for the company’s application for a coal mining licence.

Meanwhile, a report has shown that Kibo Mining’s share price on the Johannesburg Stock Exchange (JSE) and London Stock Exchange (LSE) rose by about 12 per cent on Friday morning after it announced that it had signed a memorandum of understanding with US multinational conglomerate General Electric (GE).

GE and its subsidiaries will supply equipment, technology and services to the Mbeya coal-to-power project, according to the quoted company statement.

On September 5, Kibo Mining received the first payment of $1.8 million from Chinese contractor Sepco III, the company management was quoted as saying.

This follows last month the signing of a new, redefined agreement allowing Sepco III to earn the right to become the sole bidder for the engineering, procurement and construction (EPC) contract to build the power plant component of Kibo’s Mbeya coal-to-power project, according to the company management.

Under the statement, the signed deal is in return for refunding 50 per cent of the total development costs on the project incurred by Kibo to date.

The statement has also shown that Kibo Mining transferred 2,712,477 ordinary shares in the capital of the company to Sanderson Capital Partners Limited (Sanderson) from a company held forfeited share treasury account.

According to the statement which was circulated last week by the JSE, the conversion shares were issued in September 2 this year as part of the settlement under the re-negotiated terms for payback of the loan facility from Sanderson.

The conversion shares were issued to Sanderson at a price of 5.53p per share, being the Kibo closing price on September 1, 2016 (the conversion date) for a value of £150,000, according to the JSE statement.

As notified in the company’s announcement on September 1, the facility amount of £1,500,000 converted to a 2.5 per cent equity interest in Kibo’s Mbeya coal project on the conversion date.

“The conversion shares were issued to Sanderson from the 4,090,000 forfeited shares (forfeited shares) held by the company in the Treasury Account since June 23, 2015 and have already been admitted to trading on AIM,” reads part of the statement. The JSE statement clarifies that on completion of JSE Admission the Company’s shares in issue will remain at 355,603,745 with a reduction in the number of Forfeited Shares in the company’s Treasury Account to 1,377,523.

In July this year Kibo Mining CEO Louis Coetzee, was quoted as saying that they had made a breakthrough in Mbeya to coal exploration to an extent of raising more company shares.

The progress has enabled book value to rise to £17.6million from £14.4million with £3.2million of impairments written back and profits for the year rose to £2.15million, according to Mr Coetzee. “We are well on the way towards completing our integrated bankable feasibility study on the flagship Mbeya coal-to-power project in cooperation with our joint development partner, Sepco III,” Mr Coetzee was quoted as saying.

Kibo recently completed a preliminary economic assessment at the Imweru gold project while work commenced on the Morogoro gold and Pinewood uranium projects, with joint venture partner Metal Tiger, according to him.