zambique Mining: Indian coal miners tender 200 MW pit-head power project

Indian coal mining consortium ICVL has relaunched a tender for expressions of interest (EoIs) for a company to build, own and operate a 200 MW coal-fired power plant at its Benga mine in the Mozambique province of Tete.

The company has previously called for EOIs to build the plant, but received a “lukewarm” response, ICVL Mozambique head Nirmal Jha told a conference in July last year, due to the “power offtake constraint” – understood to mean a lack of assurances from state electricity utility EDM that it will be able to buy the power output.

The Benga Power Plant will be developed on a build-own-operate basis, according to the latest tender document and will include interconnection to the local or national grid to supply either domestic users and potentially for export.

The tender will close on 3 March 2016.

The Benga open cast mine, which ICVL Mozambique operates the through Minas de Benga, Lda (MBL), is designed to produce 5.2 million tonnes per annum of coal.

However, ICVL, which took over Rio Tinto’s coal mines in Tete province after Rio wrote off its $3 billion investment there, has stopped work at the mine while it selects a new operator, after the previous contract ended at the end of 2015.

It is likely to take until the second quarter of 2016 to put a new contractor in place, and when they do start production it is expected to be at one-tenth of the mine’s nameplate capacity.

MBL will provide a long term coal supply agreement for the power plant, with an option to share some of the power for its own mine operation

Around 2.2  million tonnes of thermal coal, at 27.5% to 28% ash, 1.5 mt of low heat value coal at 50% to 60% ash and 1 mt tailings coal produced at the mine is immediately available for power generation, as it is of too low quality to be worth exporting. Zitamar understands that storing the coal incurs significant expenses for ICVL, which has to manage the risk of spontaneous combustion.

Ncondezi Energy, another Tete coal miner, is pressing ahead with plans for a 300MW coal-fired power plantwith new investor Shanghai Electric Power. Brazilian miner Vale has engaged Saudi power company ACWA Power to build, own and operate a coal-fired plant at its Moatize mine, in partnership with Mitsui of Japan.

Expansion plans could include gas

ICVL still has plans to double production of the mine to 11 mtpa once the export capacity along Mozambique’s rail line and port has expanded, and if the global coal price recovers. There is also the potential to expand the capacity of the power plant up to 2000 MW.

ICVL Moçambique also has a project to develop the methane gas potential of its coal deposits which could in the future also be used for power generation.

ICVL has already secured  heads of agreement with Government for the concession licence, the land title for the project, which will be built near the existing coal processing plant, and the environmental licence for the project, although depending on the actual design, construction and operation proposed, the licence may  need to be amended.

The successful bidder will be responsible for all other regulatory compliance.(Source: Zitamarnews)