Message Lun 9 Jan 2012 10:34

Maamba's planned thermal expansion to boost power

By Business Reporter

MAAMBA Collieries Limited (MCL) is planning to expand the thermal power plant to 900 Mega watts from the initial 300 Mega watts in view of the growing demand for electrical power in Zambia.

The company initially plans to set up a 300 MW thermal power project in Southern Province which will be connected to the national grid.

MCL chief operating officer Gurram Venkata Narayana urged the Government to explore the possibility of allotting additional coal blocs to the mining company for long-term sustainability of the power plant.

Speaking in Maamba, Mr Narayana said they had concluded the evaluation and selection of the Engineering Procurement Contract (EPC) for the first phase of the 300 MW against a global tendering process.

Shandong Electric Power Construction Corporation (SEPCO), the EPC contractor, one of the leading coal fired power plant construction companies in China would set up the power plant in 36 months time.

The estimated cost of setting up the 300 MW thermal power project was US$650 million and geo-technical investigations were under progress.

"The commencing of civil works by SEPCO whom MCL has signed for the construction of the thermal power plant would be after obtaining environmental clearance from the Zambia Environmental Management Agency," he said.

Mr Narayana said his company was on the verge of completing the mine revival plan with substantial capital expenditure in the region of $50 million already committed and advanced to SEPCO.

He said MCL had so far submitted an Environmental Impact Assessment (EIA) to ZEMA and a public hearing was set for February 2, 2012.

The company has so far pumped in $49.41 million to be utilised for capital expenditure in the mining operations and integrated coal as well as the 300 Mega watts power project.

In order for the company to have long-term sustainability, it plans to invest a capital outlay of $50 million for the Coal Mine revival and $700 million for establishing the 300 MW Coal fired power plant in phase one.

Mr Narayana said up to November, 2011, Nava Bharat (Singapore) Pty Limited and Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) have brought in $44.16 million and $5.25 million respectively.

He said the funds had been utilised for capital expenditure for the integrated Coal and Power project, mine operating expenses and for cleaning the liabilities and payments of early voluntary separation schemes.

The sponsors propose that the total capital outlay of $750 million should be met by a combination of long-term debt from the Development Financial Institutions and commercial banks aggregating to $500 million and equity from sponsor’s amounting to $250 million.

Mr Narayana said Nava Bharat and ZCCM-IH were committed to supporting the integrated coal and power project, not only for the first phase of 300 MW but also for the second phase of the power generation.

MCL was incorporated in 1997 through the Zambia Industrial and Mining Corporation and the ownership was subsequently transferred to ZCCM –IH prior to privatisation through a global tendering process.

Nava Bharat is a wholly owned subsidiary of MCL through the acquisition of 65 per cent equity stake from ZCCM-IH in April 2010 under the privatisation process.