Edenville sees opportunity in Tanzania coal import ban

Tanzania-focused coal-to-power project developer Edenville Energy updated the market on the latest developments with regard to the project on Monday.

The AIM-traded firm said that on 10 August 2016 the Tanzanian Ministry of Energy and Minerals announced a directive banning the importation of coal into Tanzania, and said it understands the ban is effective immediately.

It said the directive, as explained by the ministry, is in order to utilise and stimulate the production of coal from within Tanzania, enabling the country's resources to be brought into commercial production and the potential of the local coal industry to be more fully developed.

The Tanzanian government also indicated they wanted to promote more investment in the Tanzanian coal sector as it has significant potential to expand to provide both coal for energy and other uses such as cement production.

“Edenville welcomes the government's proactive approach to moving projects from exploration to production and wishes to clarify its position on this significant policy development in Tanzania,” the board said in a statement.

The Rukwa Coal to Power Project remains the company's core focus, and we are continuing to move forward through its stages of development accordingly.

“The Project is planned to encompass a mine mouth power plant of in excess of 100MW,” the board explained.

It said it hopes to have significant updates on the status of the project shortly, and is currently advancing various work streams alongside discussions with government authorities and potential partners.

“However, the ban on imports of coal has created a significant near term opportunity for coal sales throughout Tanzania, and the company is reviewing its options to contribute to this production accordingly.”

Edenville, through its Tanzanian subsidiary, holds a mining licence over its Mkomolo deposit and can also source coal from primary mining licences in the nearby Namwele deposit, where mining has previously occurred.

The project also holds a valid Environmental Impact Assessment Certificate from the National Environment Management Council, the board confirmed.

“[We are] therefore well placed to rapidly instigate coal production subject to the project's economic viability.

“As preparation, the company has already requested and received several quotations for mining and associated infrastructure work at the project site,” the board explained.

It is currently reviewing those, along with talking to other possible contractors and suppliers for the project.

“We have also revised our bulk sample programme to target additional areas that may have suitability for near term supply of coal.

“Suitable areas are currently being stripped to expose coal to be taken for testing, [and] we are discussing with various potential customers their future requirements.”

The project is well placed geographically, Edenville said, to take advantage of the potential in Tanzania and the surrounding countries.

It is close to the newly surfaced B8 north-to-south highway, a supply of labour and services at Sumbawanga, the Zambian border and Lake Tanganyika which offers transport options to distribute coal in the region.

To the south, rail transport exists that can take coal towards the eastern seaboard of the country.

“We will continue to update our shareholders as the new coal supply environment in Tanzania evolves in parallel with the development of the project.”