(Alliance News) - Edenville Energy PLC on Thursday said it has agreed on a coal supply deal, as the ongoing rainy season in Tanzania continues to hinder production.

The London-based thermal coal developer, focused on brownfield Rukwa coalfields in western Tanzania said it has agreed to supply 2,000 tonnes of washed coal per month at a pre-transport price of USD98 per tonne at the mine gate, from June.

The company said contract supply volumes under the agreement before June will vary based on production figures during the ongoing rainy season. Edenville expects to achieve a net price of around USD55 per tonne of washed coal.

Edenville added that it is stockpiling run-of-mine coal in order to mitigate the effects of the rainy season, which is expected to reduce coal productions long as it continues, but not reduce expected overall annual production.

The firm said it is investigating the costings and lead time of an additional wash plant at the Rukwa project. This is due to ongoing discussions with potential customers, which could result in added demand of between 8,000 and 10,000 tonnes of washed coal per month. The company noted that to meet this demand, it would require another wash plant.

Meanwhile, Edenville also said its claim for the reversal of Upendo Group Ltd's 10% interest in the local joint venture which holds licences governing Rukwa, will be heard in court in Tanzania in February. The company said the claim is being "robustly defended".

Edenville shares were down 7.5% trading at 7.75 pence per share on Thursday afternoon in London.

By Harvey Dorset, Alliance News reporter

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