Shumba plant (Source Artists Impression from Norconsult)

Shumba Coal Limited has confirmed that it has entered into a Joint Development Agreement with Mulilo Renewable Project Developments (Pty) Ltd, detailing commercial parameters of their joint development of the coal baseload electrical power projects in the region.

The coal exploration company also said as a result of the demand from future off-takers of its export coal products, it intends to incorporate a trading subsidiary for future use, namely Shumba Coal Trading Ltd (SCT).

“The Company will collaborate with Mulilo in the development, construction and operation of coal fuelled power plants with an installed capacity of at least 300 MWe, namely, the Mabesekwa Export Independent Power Plant (“IPP”), in anticipation of submitting bid responses under the South Africa and / or Botswana Coal Baseload IPP Procurement Programme,” said Shumba in a statement.

Mulilo is an independent power producer in South Africa and has developed a portfolio of approximately 400 MWe of grid-connected power plants under various procurement programmes conducted by the Department of Energy of the Government of South Africa.

As result of the demand from future off-takers of the company’s export coal products, Shumba said it intends to incorporate a trading subsidiary for future use, namely SCT.

“SCT establishment is to manage the trade of coal from projects owned by it and on an initial interim basis from other coal producers in order to build experienced capabilities in this key area of the future business value chain and meet our customers’ short term needs. Any transactions and/or trade contracts will be subject to prevailing international coal prices, commercial viability of shipments and general market conditions.”