Sacking of Tanesco chief does not affect Kibo Mining's coal project

3rd Jan 2017 12:06

(ShareCast News) - Kibo Mining has reassured investors that the sacking of the head of Tanzania's state owned electricity company does not affect the company's Mbeya coal to power project.On Sunday Tanzania's president fired Felschesmi Mramba, managing director of Tanzania Electric Supply Company (Tanesco) after it hiked tariffs.The country's energy regulator approved a 8.53% rise in tariffs by Tanesco on 29 December, which was less than half of what the company said it needed to stem losses. This was later rescinded by President John Magufuli before he sacked Mramba.Kibo mining said that Tanesco has been "undergoing policy changes and restructuring" under the new Tanzanian government, which came to power in October 2015, and sees the management changes and tariff reviews "as part of this ongoing reform and restructuring process".Chief executive Louis Coetzee, said: "The latest announcements with regard to Tanesco are not directed at any of the utility's development projects or business development policies, nor are there any indications that the latest announcements will in any way affect the Mbeya coal to power project or any of the work streams currently underway in this regard."Through our close and transparent relationship with the Tanzanian government, we will continue to diligently progress the further development of the Mbeya coal to power project and we will promptly update shareholders should any changes materially impact the current work programme of the Mbeya coal to power project."Kibo Mining holds a thermal coal deposit at Mbeya, south west Tanzania, which has a significant 43-101 defined nickel resource, and is developing a 250-350 megawatts mouth-of-mine thermal power station, the Mbeya coal to power project. The company is currently undertaking a coal mining definitive feasibility study and a power pre-feasibility study for the Mbeya project with an integrated bankable feasibility study report to be released soon.In August 2016, China based contractor Sepco III granted the company the right to become the sole bidder for the contract to build the power plant component of the Mbeya project in exchange for Sepco III refunding 50% of the development costs by Kibo to date on the project. The company received the first $1.8m tranche in September.Shares in Kibo Mining were down 3.85% to 6.49p at 1150 GMT.