File picture: Dean Hutton

Johannesburg - Kibo Mining received an advanced draft of the integrated financial model for the Mbeya Coal to Power Project (MCPP) from its financial advisers Absa/Barclays Africa, the mining company said on Wednesday.

Kibo is on the brink of developing a 250-350MW mouth-of-mine thermal power station in its power and coal mine elements the MPCC in south-western Tanzania.

The Tanzania focused mineral exploration and development company said the model would now be the subject of extensive review and further adjustment, based on the results from the final negotiations with SEPCO III and General Electric on the Engineering, Procurement and Construction (EPC) and original equipment manufacturers (OEM) bids for the MCPP.

In August, Kibo signed an agreement with China based EPC contractor, SEPCO III, granting it the right to become the sole bidder for the EPC contract to build the power plant component of the MCPP in exchange for SEPCO III refunding 50 percent of the development costs incurred by Kibo to date on the project. Kibo has already received the first tranche of this funding in the amount of $1.8 million.

The miner said final negotiations related to the MCPP EPC and OEM contracts were currently under way in Qingdao, China.

Kibo said it remained confident that these negotiations would be concluded by Friday, after which legal counsel would be instructed to convert the terms and conditions agreed upon by the parties into an appropriate EPC/OEM agreement, and signed by the end of December.

Kibo CEO Louis Coetzee said they had already seen an improvement from the internal integrated financial model. “Initial results from the MCPP integrated financial model reconfirm the MCPP as a very robust project with strong economic, operational and technical integrity,” Coetzee said.

“We have seen a significant improvement on the results from the internal integrated financial model that was prepared after completion of the prefeasibility studies for the MCPP power plant and coal mine respectively.”