Edenville Energy provides Rukwa Coal update

As noted, the performance of the wash plant has been encouraging and the company’s view has remained that a sustained output of 100 t per day, and higher, is achievable. The simplest way for future increases to be achieved will be to increase daily production hours from the current eight-hour shifts for five and a half days per week. The opportunities for longer 12 hour or even double shifts (16 hour) and seven days per week production are being examined, including seeking to ensure that on the ground machinery is capable of meeting the targeted output on an ongoing basis. In addition, the company has taken possession of two new trucks in recent days, which will be used to transport ROM coal from the coal face site to the wash plant, accelerating the process and ROM capacity substantially to avoid downtime at the wash plant.

The quality of ROM coal also has a significant impact on the output from the wash plant. The specifications of the wash plant, as a new piece of plant, indicate the output of washed coal should be approximately 35% of the tonnage inputted. This 35% output is not achievable by default and is dependent on the quality of coal inputted and the efficiency of the plant.

To further improve on output to meet and subsequently exceed the targeted 4000 t per month yield (assuming no further interruptions), the company has engaged the services of Alan Golding, a competent coal geologist who has many years’ experience in coal mining throughout Africa. Mr Golding has visited the Rukwa project site and started the process of evaluating the best location for the next ROM extraction. His efforts have thus far also uncovered a potentially significant coal seam, previously unrecognised, which if proven could enable the production of additional coal for several years to augment or replace current production if the quality of coal is higher.

If this materialises it has the potential to improve the quality of the ROM coal and the efficiency of the wash plant over time. Further work is still required to assess the extent, attractiveness and viability of this coal seam, however initial reports appear encouraging.

Demand for Rukwa coal remains strong and all of the washed coal production from 7 October 2022 to 7 November 2022, being 1480 t, was sold at prices ranging from US$40 to US$45/t, with coal fines of 200 t selling at up to US$20/t. With our current stock pile of fines in excess of 60 000 t the company is pleased to have now identified potential customers for fines and will now look to monetise over time both ongoing production of fines and the stockpile.

The company has identified a new long-term customer who is willing to enter into a contract with the company for a minimum of 3000 t per month of washed coal at a price in excess of US$50/t, subject to the company establishing a stable production level. Accordingly, the company expects to increase cashflows as it reaches higher levels of sustained output. Whilst the rainy season in Tanzania is expected to have an impact on production capacity, the company is taking steps to minimise the disruption by establishing ROM stockpiles over the next two months, which can be used if and when necessary. Moreover, the company is now better positioned to withstand the impact compared to previous years following investment in infrastructure and equipment.

Read the article online at: https://www.worldcoal.com/coal/10112022/edenville-energy-provides-rukwa-coal-update/