Ncondezi signs new infrastructure agreement

published 18 January 2012

Mozambique-focused coal miner Ncondezi Coal has signed a new rail and port infrastucture agreement with Rio Tinto Coal Mozambique and Minas de Revuboeas as part of the company's strategy to export coal from its Ncondezi Project.

The aim of the agreement is to further study the Integrated Transport Development Project, with Rio Tinto Coal Mozambique leading the study to determine the feasibility of the corridor.

The project represents a potential solution to provide coal export capacity of between 25m tonnes per annum (tpa) to 100m tpa.

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The firm says the project has the potential to be the lowest cost rail transport option for exporting coal from the Tete Province, as it is expected to be the shortest rail distance to port and will utilise new and modern infrastructure to maximise economies of scale.

Ncondezi will not be required to contribute capital to the project feasibility or development capital costs.

The agreement entitles Ncondezi to an export allocation for all of the planned 10m tpa export coal production from the Ncondezi Project.

Graham Mascall, Chief Executive of Ncondezi Coal Company, said: "Signing of the agreement represents a tremendous opportunity and step forward for the company in securing rail and port capacity for the future export of coal from our Ncondezi Project.

"Rio Tinto has significant experience in developing rail and port infrastructure projects around the world, and I believe that it is best placed to lead and implement this project in Mozambique."

The share price leapt 25.51% to 61.5p by 11:18.