Mmamabula cannot proceed without regulatory certainty - CIC

| Tuesday March 2, 2010 00:00

CIC Energy president Greg Kinross said at the Mining Indaba 2010 conference, in Cape Town, that the regulatory uncertainties were the biggest challenge confronting the advancement of the project. The company deferred certain financial, legal and engineering activities related to the Mmamabula energy project, in December.

The decision was driven by the South African government's development timeline for its energy sector integrated resource plan.  Kinross noted that the Mmamabula project could not be covered by the first integrated resource plan, which would only cover requirements for new generation capacity for the three-year period from April 2010 to March 2013. Thus, the company was awaiting the completion and approval of the second inte- grated resource plan (IRP2). Kinross noted that the IRP2, which would outline requirements for new generation capacity for 2013 and beyond, was expected to be completed in June this year.

Based on the company's understanding of the regulations, an approval of the Mmamabula energy project by the Department of Energy would only be possible following the completion and gazetting of the IRP2. He added that it was the most advanced independent power purchase agreement in the region although it was also delayed by regulatory uncertainties.

CIC Energy is developing the so-called Mmamabula energy complex, at the Mmamabula coalfield. This planned complex consists of the Mmamabula energy project, the export coal project and a potential coal-to-hydrocarbons project.The Mmabula project will supply electri-city to South Africa. (Miningweekly)