Coal producer bags major contracts

What you need to know:

The Mining Weekly reported that two contracts are for the supply of up to 6,000 tonnes and up to 3,000 tonnes a month, respectively, of washed coal to industrial customers in Rwanda and Uganda

Dar es Salaam. The local coal producer Edenville Energy has announced that it has signed two new significant contracts to supply washed coal from the company’s flagship Rukwa coal project in south-western Tanzania.

The Mining Weekly reported over the weekend that two contracts are for the supply of up-to-6,000 tonnes and 3,000 tonnes, respectively, of washed coal a month to industrial customers in Rwanda and Uganda.

The online publication says the contract to supply up to 6,000 tonnes a month has been signed with a Rwandan company, the Tara Group, a wholly-owned subsidiary of the Tanzanian company Kitanyoe Group, which currently supplies coal, gypsum, limestone and calcite to industrial users.

The end-user of the company’s coal is expected to be a major cement manufacturer in Rwanda, according to Mining Weekly.

The up-to-3,000 tonnes a month contract has been signed with the Ugandan company Springwood Capital, with the expected end-user being a Kampala-based steelworks.

As with the Tanzanian agent, Springwood supplies limestone, gypsum, calcite and iron-ore to consumers in Uganda and Kenya.

The Rwanda contract is of particular importance for the Rukwa project as it has the potential to open up a major new transport route for the company’s coal on Lake Tanganyika to Rwanda and Burundi, Edenville said on Wednesday - pointing out that this route is shorter than the conventional road transport - and more cost-effective, using low-cost barge transport, Mining Weekly reports.

It was reported that the two new contracts would account for about 75 percent of the current capacity of the recently-refurbished wash coal plant at Rukwa. The new contracts will also complement the existing long-term contracts, Edenville said.

Progression of these supply arrangements, however, depend on the company securing sufficient operating capital to fund production, Edenville announced last month.

In this regard, discussions with a potential strategic investor in the project are progressing, and a second investor has expressed interest in becoming involved with the company as a strategic shareholder at the company level, Edenville revealed.