MoU signed by Lemur & Sinohydro on Imaloto IPP
5 April 2017
Bushveld Minerals Ltd
("Bushveld" or the "Company")
MoU signed between Lemur and Sinohydro on Imaloto IPP
Bushveld Minerals Limited (AIM: BMN), a diversified mineral development company with projects in Southern Africa and Madagascar, is pleased to announce the signing of a Memorandum of Understanding ("MoU") between its wholly-owned subsidiary, Lemur Holdings Limited ("Lemur") and Sinohydro Corporation Limited ("Sinohydro"). The MoU gives both companies exclusive rights to work with each other on the development of an initial 60 MW independent power producer ("IPP") coal power plant and associated 200 kilometre transmission line in southern Madagascar (the "Project"). It is anticipated that the coal fuel for the power station will be provided from Lemur's coal mining permit area in Madagascar.
The MoU's objectives include:
· Development of a Bankable Feasibility Study ("BFS") and a Project Implementation Proposal ("PIP") for the project by Sinohydro, at its own cost, within 12 months of signing the MoU;
· Preparation by both parties of an Environmental Impact Assessment for the Project;
· Preparation by both parties of EPC and O&M contracts for the IPP plant and the EPC contract for the transmission line within 18 months;
· Cooperation between the two parties to secure both debt and equity funding for the project;
· Potential establishment of a future company for the Project upon completion of the BFS, in which Sinohydro's parent company, PowerChina, may take an equity interest;
· Lemur will continue the development of its mine in order to supply coal to the Imaloto IPP.
Lemur has to date completed a conceptual study, followed by more detailed pre-feasibility studies ("PFS") for the mine, power plant and transmission line. These studies demonstrated favourable project economics, including the existing and future demand for electricity in the area. Sinohydro will use its vast expertise in power plant and transmission line engineering and construction to build on the work already done by Lemur in the PFS.
The Project stands to have a transformational impact on Madagascar. At present, no electricity grid exists in the southern part of the island. The Project would be able to not only supply electricity cheaper to existing mining and industrial operations in the region, but to also deliver electricity to tens of thousands of people currently without access to power. Realising this, the Madagascar power utility, Jirama, is currently negotiating an offtake agreement with Lemur for electricity for the IPP.
Commenting on the executed Agreement, Fortune Mojapelo, CEO of Bushveld Minerals, said: "This is another example of the progress Bushveld has made across its platforms in 2017, in what we forecasted as a pivotal year for our Company."
"The MoU signing is a major step forward in the development of our coal mine and power plant project in Madagascar. Sinohydro and its parent company PowerChina, bring a wealth of technical expertise in building such projects and bringing them into operation. The MoU reinforces the commercial merits of the Project and the bankable feasibility study will add significant value to the development of the power Project. We look forward to working with Sinohydro and the Madagascar authorities in implementing the Project and realising its immense positive social impact it will create.
Commenting on the MoU, Liu Kai, Vice President of Sinohydro, said: "As a major breakthrough for the energy sector of Madagascar, this project will help solve the problem of power shortage and contribute to local economic growth in the south of the country. Sinohydro, with rich experience in thermal power field, is ready to help Lemur complete preliminary work. We both hope the Project can move forward into the next stage as soon as possible with the strong support of Madagascar government."
Enquiries: info@bushveldminerals.com
Bushveld Minerals
Fortune Mojapelo +27 (0) 11 268 6555
Beaufort Securities
Jon Bellis +44 (0) 20 7382 8300
Strand Hanson (Nominated Adviser)
Andrew Emmott / Ritchie Balmer +44 (0) 20 7409 3494
Blytheweigh
Tim Blythe / Camila Horsfall +44 (0) 20 7138 3204
Gabriella von llle +27 (0) 711 121 907
Notes to editors
About Lemur Holdings and Imaloto Power Project Limited
Lemur Holdings Limited, 100% owned by AIM-listed Bushveld Minerals Limited, through its dedicated power project company, is developing a 60 MW coal power plant as an independent power producer and a 200 km transmission line to connect the power plant with electricity consumers in the region. Lemur also holds a mining license and is developing a JORC compliant 136 million ton coal resource, of which 68% is measured. The mine will supply coal to the Imaloto IPP plant and potentially beneficiate additional volumes into export quality coal.
About SinoHydro
Sinohydro Corporation Limited is a subsidiary of PowerChina one of the largest power engineering construction companies in the world. Sinohydro focuses on engineering, procurement and construction of transmission infrastructure and power plants, including thermal, hydro and renewable energy technologies.Currently, it has 524 international projects in more than 116 countries, with total contract value of nearly USD 42.50 billion.
About Bushveld Minerals Limited
Bushveld Minerals is a diversified AIM listed mineral development company with a portfolio of vanadium, iron ore, tin and coal greenfield assets in Southern Africa and Madagascar. The Company's flagship platform, the vanadium platform, includes the Mokopane Vanadium Project, the Brits Vanadium Project, and the Bushveld Iron Ore & Titanium Project. The tin platform comprises the Mokopane Tin Project (South Africa), the Marble Hall Tin Project (South Africa) and the Uis Tin Project (Namibia) whereas the Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers, makes up the Company's coal platform.
The Company's vision is to become the largest low cost integrated primary vanadium producer through owned low-cost high-grade assets. This incorporates development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage solutions provider. Whilst the demand for vanadium remains largely anchored in a slow growing steel industry, Bushveld Minerals believes there is a strong potential for imminent significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.
Bushveld Minerals' approach to project development recognises that whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production with a visible timeframe, low capex requirements and scalability are important factors in retaining an attractive exit option. This philosophy is core to the Company's strategy in developing projects. Detailed information on the Company and progress to date can be accessed on the website: www.bushveldminerals.com
This information is provided by RNS
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