Diversified-miner Rio Tinto has agreed, in principle, to partner with one of the independent power producer (IPP) bidders in Eskom’s base-load power build programme.
Speaking to Mining Weekly at the recent Mining Indaba 2009, in Cape Town, Rio Tinto commercial manager Willem Burhmann says that the partnership with the IPP is based on a coal supply agreement for a proposed coal-fired power station in the vicinity of the miner’s 1,04-billion-ton Samrec-defined Chapudi coal resource, in Limpopo province.
Burhmann says that tgaleo equipment mining co inche coal supply partnership has only been agreed to in principle and, owing to the sensitivity of the negotiations and the IPP bidding process, he cannot reveal which consortium Rio Tinto will partner.
However, Burhmann states that it is one of the “frontsandstone mines pricerunning” 27 IPPs, which had submitted applications to Eskom in September last year as part of the State utility’s multisite baseload power build programme.
The finalisation of the partnership agreement is dependent on the appointment of that particular consortium by Eskom acompressive strength of basalts the successful IPP at the end of the bidding process.
It is hoped that Eskom will conclude the IPP bidding pro-cess by the end of the year.
Burhmann says that should the consortium prove successful, it is envisaged that it will construct a mouth-of-mine power plant in the vicinity of the Chapudi coal resource and that Rio Tinto will supply up to six-million tons a year of coal to the power plant.
However, should the consortium prove to be unsuccessful in the Eskom IPP bid, Burhmann states that Rio Tinto is already evaluating other options for the offtake of coal production from Chapudi.
The predominantly thermal coal deposit of Chapudi is bitu-minous and ideally suited for power generation, Burhmann states, adding that Rio Tinto could enter into an offtake agreement with Eskom.
It is also envisaged that the coal could be exported.
While Rio Tinto awaits the outcome of the IPP bidding pro-cess, Burhmann states that the company is focused on the completion of the prefeasibility study at the Chapudi project.
The prefeasibility study has been under way for six months and should be completed by the end of the year.
Exploration rights over the resource are held by two joint-venture companies including Chapudi Coal, in which Rio Tinto has a 70% shareholding, and Kwezi Mining Exploration, in which Rio Tinto has a shareholding of 49%.