Kibo Mining PLC agreed to form a joint venture with Mozambique energy company Termoeléctrica de Benga SA to potentially develop the Benga independent power project, subject to approvals.
The company said June 6 that the deal includes the right to construct and operate a 150-MW to 300-MW coal-fired power station.
Kibo, which will have an initial 65% participation interest in the Benga joint venture, hopes to develop the Benga project alongside its Mbeya coal-to-power project in Tanzania and the recently acquired Mabesekwa coal independent power project in Botswana.
The Benga assets will be transferred to a new company to be formed, and Kibo must maintain its initial 65% interest by funding up to £1 million of work related to a definitive feasibility study.
Kibo and Termoeléctrica's contributions will be on a pro rata basis pursuant to positive feasibility results and construction of a coal-fired power plant.
If the joint venture is terminated before Kibo meets its earn-in threshold, it can become a creditor of the new company, and if it is terminated after meeting the threshold, Kibo will retain an interest of at least 15%.
Upon completion of a positive feasibility study, Kibo will be able to increase its interest in the Benga project to 85% within one year at a price to be determined.
Kibo said a pre-feasibility study on the Benga development is "well advanced," and discussions with various potential power off-takers and thermal coal producers are ongoing.
