Kibo receives final commercial bids for Mbeya project

JOHANNESBURG (miningweekly.com) – The final commercial bids for Kibo Mining’s Mbeya coal-to-power project’s (MCPP’s) engineering, procurement and construction (EPC) and original-equipment manufacturer (OEM) contracts were received from Sepco III and General Electric (GE) on October 31, the Tanzania-focused company announced Tuesday.

The signing of the final EPC and OEM contracts is currently scheduled for the end of December. Kibo has also submitted its mining right application for Mbeya.

Tractebel Engineering (TE) will now subject both bids to a stringent benchmark, previously developed by TE, to determine whether the bids comply with international best standards, practice and price. The bids also need to meet specific conditions that were stated in the respective bid specifications.

The benchmarking process will be completed over the next three weeks, whereafter the company and its technical, financial and legal advisers will engage Sepco III and GE in a final round of negotiations by the beginning of December.

"We have achieved significant progress at the MCPP in 2016 and, by the end of the year, we will have met all of its ambitious 2016 development targets, albeit that not all were met within the original target dates, in spite of limited financial resources as well as delays caused by policy reviews and changes in Tanzania,” noted CEO Louis Coetzee.

MCPP is now independently recognised as a robust, well-advanced project. 

“It is disappointing that we will not be as far advanced with financial close as previously anticipated, owing to the fact that we cannot proceed with the finalisation of the power purchase agreement, until such time as the Tanzanian government has completed its policy review process,” he said.

Coetzee added that the company is in constant discussion with government on this matter and has received continued cooperation and reassurance that it will be able to make up for the time lost during the policy review process.

“Owing to this delay, we will have to reschedule certain activities to ensure that the MCPP development timeline is not compromised,” he said.