The MCPP is in the Songwe Region of Tanzania and the plan is to develop a co-located coal mine and thermal power plant around a stated 120.8 Mt NI 43 101 thermal Coal Resource for which the Company holds seven mining licences. A Definitive Feasibility Study has been conducted on the mining project which underpins its value with an indicated IRR of 69.2%. The 300 MW mouth-of-mine thermal power station has long term scalability to approximately 1000 MW, with a full Power Feasibility Study that has been completed, highlighting an annual power output target of 1840 GWh based on annual average coal consumption of approximately 1.5 Mt. An Integrated Bankable Feasibility Study report for the integrated project indicated total potential revenues of US$ 7.5-8.5 billion over an initial 25-year mine life, post-tax equity IRR between 21-22%, debt pay-back period of 11-12 years and a construction period of 36 months.
The project suffered a set-back in 2019 due to non-qualification to participate in a Tanzanian Government PPA tender process, a process which to date has not yet been completed reflecting a more hostile change in the Tanzanian Government’s policy towards foreign investment and its support of private energy projects. With the recent change of President in Tanzania and initial indications of a more favourable energy project development policy on the horizon, the Company more confident that it can re-engage with all stakeholders in Tanzania to progress the MCPP and monetise its coal asset in the country.