File picture: Dean Hutton
Johannesburg – Kibo Mining said on Thursday that it has decided to implement a diversified production strategy for the Mbeya Coal Mine following the results of the integrated bankable feasibility study at the Mbeya Coal to Power Project as well as latest policy changes in Tanzania.

Kibo is developing a 250-350MW mouth-of-mine thermal power station, Mbeya Coal to Power Project, in its power and coal mine elements in south-western Tanzania.

The resources company has also positioned itself to conclude negotiations on a Power Purchase Agreement with the Tanzanian government following the completion of restructuring and policy changes at the state-owned power supplier.

Kibo said this diversified production strategy would see Mbeya Coal develop its coal mine to produce coal for the Mbeya power plant as its primary client, with the domestic coal market as a secondary client.

The Tanzania-focused mineral exploration and development company said it has already engaged with the domestic market in this regard with very positive response thus far.

Kibo Mining chief executive Louis Coetzee said the diversified production strategy was adopted with the aim of maximising commercial opportunities.

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"Our decision to adopt a diversified production strategy for the Mbeya coal mine follows from the results of the Definitive Mining Feasibility Study, where we specifically investigated parallel commercial opportunities in addition to producing coal for the Mbeya power plant only, the ultimate results from the integrated bankable feasibility study, as well as latest policy changes in Tanzania," Coetzee said.

"An integrated consideration of all these aspects shows that a diversified production strategy is indeed feasible and has potential to significantly enhance the economics of the Mbeya coal mine and which could allow the mine to be put into production earlier than planned for the Mbeya Coal to Power Project."