Australian firm gets coal mining permit in Tanzania
reuters.com
Mon Aug 22, 2011 5:33am EDT
(Corrects timeframe in bullet point to per month from per day)
* Mining to start by month's end
* Initial production at 10,000 tonnes per month
* Tanzania faces chronic power shortages
By Fumbuka Ng'wanakilala
DAR ES SALAAM, Aug 22 (Reuters) - Australia's Intra Energy Corporation (IEC) said its local unit in Tanzania had received a licence for a coal mining project that would initially produce 10,000 tonnes a month and that it planned to build a coal-fired power plant in the east African country.
IEC said on Monday its subsidiary, Tancoal Energy, would begin mining coal at the Mbalawala mine in south-western Tanzania this month. The Mbalawala project will be Tanzania's first privately funded coal mine.
"The mining licence has been issued to Tancoal Energy Ltd (Tancoal) over the initial mining area of the Mbalawala mine at the Ngaka coalfields in southwest Tanzania," IEC's executive chairman, Graeme Robertson, said in a statement to the Australian Securities Exchange.
"Coal mining will commence during August, when land compensation has been finalised. Mining will commence at the rate of 10,000 tonnes per month to meet sales contracts to local industry."
East Africa's second-largest economy intends to invest in thermal plants powered by natural gas, oil, jet fuel and coal to wean itself off weather-dependent hydro power, which accounts for 55 percent of its energy sources.
Tanzania plans to spend $742 million by the end of next year for emergency power projects aimed at ending chronic energy shortages.
IEC said on its website it had plans to build a 450 megawatt coal-fired power plant and export thermal coal to other countries.
IEC, which has a 70 percent stake in Tancoal, said it would increase coal output as it concludes additional sales contracts.
The Tanzanian government owns the remaining stake in Tancoal through the state-run National Development Corporation (NDC).
Tancoal owns several exploration concessions in Tanzania's Ngaka basin, which it says has potential reserves of up to 1 billion tonnes of coal.
The Tanzanian government last year renationalised the Kiwira coal mine in Mbeya region after an irregular privatisation process in 2005 and is now seeking a $400 million loan from China to develop a 200 megawatt coal-fired power plant. (Editing by Richard Lough and Jane Baird) |
