Tanzania has awarded a coal mining license to a London-listed Edenville Energy Plc , which plans to invest $176 million in a mine and a coal-fired power plant, the country’s energy and minerals ministry said on Monday.
The British-headquartered coal and uranium explorer will build an open cast coal mine at the Mkomolo area in the southwestern Tanzanian town of Rukwa.
“After commencing coal mining activities in June, the company plans to build a 300-megawatt power plant between 20 and 22 months after getting an environmental impact assessment certificate,” the ministry said in a statement.
Edenville estimates that the area has up to 173 million tonnes of coal reserves, according to Tanzania’s energy and minerals ministry.
Tanzania has coal reserves of up to 5 billion tonnes, up from a previously stated figure of about 1.5 billion tonnes, according to government estimates.
Developing coal production is part of the resource-rich east African country’s broader energy strategy, which includes exploiting recent big gas finds and reducing reliance on hydro-power.
China’s Sichuan Hongda signed a $3 billion deal with Tanzania in 2011 to mine coal and iron ore.
Tancoal Energy, a joint venture between Australian-listed Intra Energy Corporation and Tanzania’s government, runs the Ngaka coal project, while Tanzania’s other mine at Kiwira is run by the state.