Edenville Energy plc (AIM:EDL), the company developing a coal project in southwest Tanzania, is pleased to announce that it has entered into a Coal Offtake Agreement (the “Agreement”) with Riftcot Limited (“Riftcot”).
Riftcot is a coal and commodities trader based in Kenya, with operations across Africa. It is a leading supplier of coal to the East Africa market. More information on Riftcot may be found at www.riftcot.com.
The Company recently started treating coal through its wash plant and once up to full production, currently anticipated to be in January 2018, and utilising the current plant and equipment levels, the Company anticipates production volumes of at least 10,000 tonnes of coal per month.
Key terms of the Agreement:
The Agreement is for Riftcot to purchase, at a recognised commercial market price, up to 75 per cent of the Company’s Rukwa Coal Project’s yearly production and will run for an initial term of five years commencing in October 2017. Pursuant to the Agreement, Riftcot will receive an arrangement fee for each delivery of coal to cover marketing and provision of transport.
General supply terms of the Agreement include Edenville supplying a specific product to meet the needs of Riftcot’s end users, with Riftcot purchasing the coal at the minegate and in the majority of cases transporting it to the end user.
Importantly, the Agreement allows major industrial groups in the East Africa Region, including Tanzania, to be supplied with Edenville’s coal through Riftcot’s established marketing and logistical framework. It is the Company’s belief that it will benefit from the commercial and logistical experience Riftcot brings to the operation and similarly Riftcot will be able to access the only washed coal product currently available in Tanzania and one of very few in East Africa as a whole.
The Agreement is for commercial production and external sales from the Company’s Rukwa Coal Project and does not include the supply of any coal to the planned mine mouth power plant at Rukwa, the Company’s “Rukwa Coal to Power Project”.
Rufus Short, CEO of Edenville commented: “The signing of the Agreement with Riftcot is another significant step forward for the Company. We look forward to working alongside Riftcot to build Edenville’s name into a recognised coal brand in East Africa.
“We see this is an opportunity to leverage Riftcot’s trading platform and experience with Edenville’s newly opened project which will produce washed coal for the East African market. By committing 75% of our production we are able to give volume to Riftcot’s supply contracts whilst also having some product in reserve to supply other clients with their individual requirements.
“This is a period of rapid progress for Edenville and we look forward to updating the market as the project progresses.”
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
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