Ncondezi Energy said it has agreed to enter into exclusive negotiations with China Machinery Engineering and General Electric South Africa for them to develop a 300MW coal fired-power plant and open-pit coal mine in Tete, Mozambique.
The transaction would see the pair acquiring a minimum 60% equity stake in the integrated project, Ncondezi Energy said.
The existing agreement between Ncondezi energy and GE grants exclusivity until April 30 to conclude a binding joint development agreement.
Ncondezi Non-Executive Chairman, Michael Haworth, commented: “The Company is pleased to announce agreeing to enter into exclusive negotiations with CMEC and GE, following an intensive process to identify a new partner to take a leadership role in delivering the 300MW coal fired power project and integrated mine. The CMEC and GE NBO has the potential to materially de risk the development, financing, construction and operation of the Power and Mine Projects. CMEC and GE’s collective experience in both the energy and mining sectors and specific experience and reputations operating in Mozambique, gives them distinct advantages as a potential partner with Ncondezi. The NBO proposes to develop the power plant and mine projects as an integrated project, which has the potential to greatly simplify the development, commercial and financing aspects of the process to FC and is welcomed by Ncondezi. The Board believes that a return to CFB technology, where technical work is more advanced, will also facilitate a shorter, more cost effective route to FC.
Earlier in the week, Ncondezi Energy confirmed that it raised GBP750,000 before expenses through an oversubscribed placing of shares.
Ncondezi is a power development company with an integrated thermal coal power plant and mine project located on the Ncondezi licences in the Tete Province, Northern Mozambique.
The power plant project will be developed in phases of 300MW units, up to 1,800MW. The first 300MW phase (“300MW Project”) will use existing transmission capacity to meet current demand on the Northern Grid in Mozambique. The Ncondezi coal deposit has a 4.7 billion JORC coal resource which is capable of supporting a large scale, long life operation. The 300MW Project is targeting construction in 2015 and commissioning in 2017. The cost of the project is estimated between US$500 – US$600 million.
The Ncondezi Board and management team is made up of individuals with significant experience across the key areas of mining, power, project development, operations and finance. The team enjoys strong relationships with all levels of Government and is complemented by a group of internationally recognised world class consultants in the fields of power, mining, geology, technical, social and environmental.
Ncondezi’s power project is closely aligned to the Mozambican Government’s stated objective of accelerating the electrification of the country and expanding access to electricity. Mozambique is the largest exporter of power to South Africa and yet only 20% of the country is currently electrified. The 300MW Project will help Mozambique maximise the potential of its resources creating direct and indirect jobs, in-country beneficiation, contributing to the economic development of the country’s industrial and consumer bases and most importantly advancing social upliftment.
The Company is listed on AIM under the ticker symbol: NCCL.