TANZANIA SITS ON RICH COAL VEIN

Dar es Salaam — Ngaka Coal Mine which is a Tancoal's flagship project, located in the vast coalfields of South Western Tanzania said its Ngaka Basin has potential to host up to one billion tons of high quality thermal coal.

The expected one billion tons of high quality thermal coal comes from Tancoal proven coal resources in excess of 200 million tons, plus the Ngaka Basin, Mbalawala and Mbuyura/ Mkapa sub-basins.

This means Ngaka Coal Mine reserves can serve the country for more than 100 years producing 300KW of electricity and others for commercial needs within and outside the country.

Tancoal's Chief Operating Officer, Tarn Brereton told East African Business Week that there is more than enough coal for generating power and exporting to neighboring countries.

Brereton said they are major operating coal mine in the East African region, apart from supplying cement factories in the country, they also export.

He said they are going to increase the capacity taken to support industrial development in Tanzania with some supply into Kenya, Uganda and Malawi.

"We are now producing 40,000 tons of coal per month and we are expecting to increase production capacity by 50% this year," he said.

Tancoal is investing in the expansion of the Kitai stockpile area as its production and sales are continually rising of which currently production is at the rate of 200,000 tons per year and is expected to expand to 360,000 tons by the end of 2014.

The coal miner expects to increase the capacity of mineral exploring equipment mid next year so as to expand coal production to 500,000 tons a year by 2015.

The current industrial market in East Africa is about 400/450,000 tons per year but is rapidly expanding with industrial and construction growth and should reach 1 million tons per year by the end of 2015.

Tanzania plans to develop the power station and associated power transmission infrastructure so as to increase the country's electricity supply by 40%.

Coal mining commenced at Ngaka in August 2011, with initial mining conducted by a simple, low cost "truck and shovel" operation, and selling up to 250,000 tons per annum of unwashed coal to Tanzania's domestic customers.

As the mining rate increases, Tancoal will ramp up coal production to meet the requirements for the Power Station comes on-line in 2014.

In addition to supplying coal for domestic customers and the Power Station, the Ngaka Coal Project will produce between 2-3 metric tons per annum of coal for export.

At an estimated maximum production rate of 4-5 metric tons per annum, the Ngaka Coal Project has sufficient proven coal resources for over 50 years of profitable, low-cost production.

The Mbalawala coal concession was granted by the NDC to Tancoal in September 2009, and initial drilling confirmed the presence of multiple seams of high quality thermal coal averaging 4.9 metres in thickness.

The Mbuyura - Mkapa Coal project concession was granted to Tancoal in February 2009 and has the potential to host several hundred million tons of high quality thermal coal.

Tancoal was established to explore and develop the vast Ngaka coal fields located near Songea in southwest Tanzania. Tancoal intends to develop a coal mining operation at Ngaka to supply feed-stock to thermal coal-fired power station to be constructed.

It was established on April 2008, as a Joint Venture between the National Development Corporation of Tanzania (NDC) and Intra Energy (Tanzania) Limited (IETL), an 100% owned subsidiary of Australian publicly listed company, Intra Energy Corporation.

Under the terms of the Joint Venture Agreement, IETL owns 70% of Tancoal and NDC own 30%.

IETL is owned by Intra Energy Corporation and NDC is a statutory corporation, established by an Act of the Tanzanian Parliament in 1962, to identify and develop economically viable projects in partnership with the private sector.

East African Business Week