Australia's Intra Energy Corporation (IEC) plans to invest $236-million in Tanzania's first private coal mine and a coal-fired power plant to reduce nation's reliance on hydro power, its chairman told Reuters on Wednesday.

IEC executive chairperson Graeme Robertson said mining was expected to start in the coming week, with the first consignment of coal expected in October.The mine was projected to expand its output to 500 000 t/y by 2013, with a long-term maximum output capacity of five-million tons a year, he said.

IEC's local unit in Tanzania, Tancoal Energy, had already spent $23-million on exploration and initial development costs of the Mbalawala mine, in the south-west of Tanzania."This investment will increase by some $93-million (in order) to increase the mining to a rate of up to five-million tons a year," Robertson said in an interview.
He said the company would invest an additional $120-million in a coal-fired power plant near the mine."We have identified several possible sites for power stations near Mbalawala for 120 MW. We are trying to fast-track this station with two 60MW units to be installed by end 2013," said Robertson.

"The cost is approximately $1-million for each mega-watt or $120-million for the initial 120 MW at Mbalawala." Robertson said the company was also considering construction of a 400-MW power plant in the southern Tanzanian town of Mbeya and another 400-MW power station in Dar es Salaam, between 2013/4 and 2017/8.

CHRONIC POWER SHORTAGES

Tanzania wants to spend $742-million by 2012, for emergency power projects aimed at ending chronic energy shortages, and intends to switch to thermal power sources such as coal.

This would wean the country off weather-dependent hydro power, which accounts for 55 percent of its electricity generation. IEC owns 70 percent of the shares in Tancoal Energy, while the Tanzanian government holds the remaining stake through the state-run National Development Corporation (NDC).The first stage of the mine development targets initial production of 10 000 t/m, rising to 30000 t/m in 2012, and stabilising at 500 000 t/y, the year after.

"The initial markets are (local) industrial markets such as Mbeya Cement and Tanga cement," said Robertson "Our combustion engineers have found strong interest from factories wanting to generate their own electricity with coal-fired generation because of the unreliability or lack of availability of electricity," he said.

Tanzania imports 250 000 t/y from South Africa. The Tanzanian mine has a mineable reserve of 40-million tons of coal.