Kibo has agreed to a coal supply deal with Vale

The Africa-focused energy company has agreed to a coal supply deal with Vale as its Benga project progresses.

Kibo Energy has reached a coal supply deal with Vale for its Benga Power Plant Project (BPPP) in Mozambique. Despite delays and constraints resulting from Covid-19, it says it remains on track to deliver the project within the broad timelines already set out.

In an update yesterday, the Africa-focused energy company said the agreement would meet the fully operational coal requirement of a 150 megawatt coal-fired power plant. It converted its current non-binding term sheet into a mutually binding term sheet for the coal supply.

Vale, a subsidiary of Brazilian mining giant Vale S.A., is situated close to the BPPP site. Kibo said the agreement reached with the company was based on the findings of its optimised definitive feasibility study (DFS), which indicated that a blend of varying quality bituminous coal could be fed into the power plant’s boiler. The deal allows for 650,000 tonnes of coal a year, structured to supply the various qualities of coal it requires for the optimal blend.

Kibo said it was currently reviewing the findings from the optimised DFS and a final version of the would be delivered to the company early next month. These findings were also presented to Mozambican state-owned electric utility EDM during a preliminary briefing last week. The company is currently pursuing a power purchase agreement with EDM, in addition to a deal with Baobab Resources to supply power to its Tete Steel Project in Mozambique.

We are extremely pleased with the progress on the Benga project, as the technical work is now nearing completion and seamlessly integrates with the commercial and statutory developments,” the company said. “The optimised DFS and binding term sheet for a Coal Sale Agreement are key cornerstones/prerequisites to take the EDM PPA negotiations progressively forward towards agreeing a final PPA.”

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