Australian mining company Intra Energy Corporation (ASX:IEC) and Chinese hydropower company Sinohydro Corporation will jointly develop the 270MW Ngaka coal power station in south-western Tanzania.
This was indicated in a recently signed Memorandum of Understanding (MoU) between the two companies.
According to the MoU, Sinohydro will be the majority shareholder and will be responsible for the engineering, construction, operations, and financing.
Tancoal Energy, a subsidiary of IEC, will be responsible for the development, mining and supply of coal to the 270MW Ngaka coal-fired power station.
IEC Chairman Graeme Robertson said: “The MOU represents the next stage in entering into a formal relationship to bring the project to fruition.”
The Ngaka power station is expected to consume up to 1.2m t of coal per year from Tancoal, which has a coal resource of 423m t.
Upon completion, the power station will provide more than 15% of Tanzania’s current electricity generation needs through a 220kV transmission system.
Tanzania currently generates less than 1% of its total installed capacity of 1,358MW from coal-fired power plants that are fully supplied by imported coal according to the African Development Bank (AfDB).
The Ngaka power station is part of the Ngaka Coal Project, which is operated by Tancoal since 2011. The Ngaka basin comprises the Mbalawala sub-basin in the south and the Mbuyura-Mkapa sub-basin to the north.
Tancoal indicates that the Ngaka basin has the potential to host up to 1b t of high quality thermal coal.