TIDMBMN
RNS Number : 3261X
Bushveld Minerals Limited
23 November 2017
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
23 November 2017
Bushveld Minerals Limited
("Bushveld" or the "Company")
Lemur Secures Power Purchase Agreement with National Utility
JIRAMA for the Imaloto Power Project
Bushveld Minerals Limited (AIM: BMN), a mineral project
development company with a portfolio of vanadium and coal assets in
Southern Africa and an investment in tin, is pleased to provide the
following update about Lemur Holdings ("Lemur"). Lemur, Bushveld's
coal and energy subsidiary that is developing an integrated thermal
coal mining and Independent Power Producer asset in Madagascar,
has, through its Madagascan subsidiary Imaloto Power Project SARL,
executed a binding Power Purchase Agreement (PPA) with Madagascar
state-owned utility, Jiro sy Rano Malagasy (JIRAMA) as part of the
Imaloto Power Project in Madagascar ("the Project"). The power
plant will be located at the mine-mouth of Lemur Holdings' coal
deposit, which has approximately 136 million tonnes of coal. The
addition of a power component will unlock the value of the coal
asset, while at the same time securing reliable electricity
off-take backed by a government entity.
Commenting on these developments, Fortune Mojapelo, CEO of
Bushveld Minerals, said: "The signing of the Power Purchase
Agreement with JIRAMA achieves a critical milestone in the
development of Lemur's integrated coal-to-power project. Coupled
with the on-going progress on the project's bankable feasibility
study, and our recent strengthening of the Lemur management team,
this achievement adds significant value to the project and brings
it even closer to implementation.
Furthermore, this agreement delivers the anchor off-taker for
the Imaloto Power Project in Madagascar. In addition to its
established customer base, proven operational capability and
existing mini-grid distribution infrastructure in the region, the
agreement with JIRAMA secures the all-important support from the
Government of Madagascar to provide reliable, base load electricity
to the southern part of the island. This will allow for rapid
commercial expansion of the power network in the country. On top of
providing electricity, the project will bring additional coal
mining jobs and revenue. We thank the management of JIRAMA and the
Government of Madagascar for their support and, together with local
stakeholders, look forward in continuing to develop the
infrastructure and economy in the southern Malagasy region."
Commenting on the project, Olivier Jaomiary, Chief Executive
Office of JIRAMA, noted: "Since the Imaloto project uses coal which
is a locally sourced fuel source for base load power, it will help
reduce JIRAMA's exposure to the volatility of imported fuels. In
the long run, we believe it will help Madagascar to increase its
generation capacity while providing a source of affordable
electricity to end users. Overall, we expect the Project to help
bring about economic development and create employment in
Madagascar."
Highlights:
-- The PPA is for a period of 30 years, commencing in 2021 post construction;
-- The PPA will be for an initial 10MW capacity, which is
planned to increase in accordance with JIRAMA's requirements;
-- The project will provide significant developmental benefits
to the region and over US$1billion in new fiscal revenue to the
country over its lifetime;
-- The PPA is based on the International Finance Corporation's
(IFC) guidelines for contracts of this nature in Madagascar. Given
that this is the first project of its type in Madagascar, the
agreement also contains provisions for lenders' standard terms and
conditions to ensure the bankability of the project;
-- The signing ceremony of the landmark agreement, held in
Antananarivo, was attended by Olivier Jaomiary, the CEO of JIRAMA,
Bushveld Minerals Chairman, Ian Watson, local representative, Tom
Cushman and Lemur Holdings CEO, Prince Nyati.
JIRAMA's off-take is expected to increase in accordance with
rising demand, starting with an initial 10MW of the nameplate 60MW
capacity. For example, the current installed thermal generation
capacity in the town of Tulear is already 15MW. Lemur has
identified numerous communities and industrial users, located
between the Imaloto Power Plant site and Tulear, which will demand
an additional 30MW of generation capacity. Negotiations are already
in process for off-take agreements with these users.
The significance of the PPA, however, far exceeds the size of
the off-take. According to the laws of Madagascar, a PPA with a
national utility is an essential pre-requisite for the development
of an Independent Power Producer (IPP) project, especially the
granting of generation licence, or concession. With JIRAMA as the
anchor off-taker, Lemur is now able to build on this achievement
with several private consumer PPAs. The project is also on track to
complete a bankable feasibility in the first half of 2018.
The integrated project will act as an enabler for sustained
electricity production for the population that has traditionally
relied on subsistence or diesel power-based solutions. According to
PowerAfrica, Madagascar currently has only 504 MW of installed
generation capacity catering to 24 million people. The Imaloto
Power Project is planned to grow this by nearly 12% in a region
that currently has no power grid. Furthermore, the base load
coal-fired power project would also look to attract industries to
the area, especially since the project includes transmission lines
reaching major parts of south-western Madagascar to connect the
power plant with multiple, currently off-grid, communities. The
integrated nature of the project will facilitate significant
financial benefits to the country overall, including planned direct
investment of nearly US$300 million and over US$1 billion to the
national fiscus revenue over the project's lifetime from royalties,
taxes and other types of government revenue.
Enquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo, Chief
Executive Officer
Lemur Holdings +27 (0) 11 268 6555
Prince Nyati
SP Angel Corporate Finance
LLP +44 (0) 20 3470 0470
Nominated Adviser & Broker
Ewan Leggat
Blytheweigh
Financial PR
Tim Blythe / Nick Elwes +44 (0) 207 138 3204
Gabriella von Ille +27 (0) 711 121 907
ABOUT LEMUR HOLDINGS
Lemur is a wholly-owned subsidiary of AIM-listed Bushveld
Minerals Limited that, through its dedicated power project company,
Imaloto Power Project SARL, is developing a 60 MW, base load coal
power plant as an independent power producer that will increase
Madagascar's installed generation capacity by 12%. The integrated
project includes over 200 km in transmission infrastructure to
connect the power plant with electricity consumers in southern
Madagascar. Lemur also holds a mining license and is developing a
JORC compliant 136 million tonne coal resource, of which 68% is
measured. The mine will supply coal to the IPP plant and
potentially beneficiate additional volumes into export quality
coal.
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is an AIM listed mineral project development
company with a portfolio of vanadium and coal assets in Southern
Africa and an investment in tin.
The Company's flagship vanadium platform includes the Mokopane
Vanadium Project, the Brits Vanadium Project, and an interest in
Bushveld Vametco Alloys (Pty) Ltd primary vanadium mining and
processing company. The coal platform comprises the wholly-owned
Imaloto Coal Project, which is being developed as one of
Madagascar's leading independent power producers. The Company's tin
interests are held through its shareholding in AIM listed AfriTin
Mining Limited.
Bushveld's vision is to become one of the largest, low cost,
integrated primary vanadium producers through owned 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 the
steel industry, Bushveld Minerals believes there is strong
potential for an imminent and significant global vanadium demand
surge from the fast-growing energy storage market, particularly
through the use and adoption of Vanadium Redox Flow Batteries.
The Company's 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 within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. 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
The company news service from the London Stock Exchange
END
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