(Alliance News) - Edenville Energy PLC provided a positive update for its Rukwa coal project on Tuesday, noting new orders, higher coal prices and improved economic conditions in Tanzania.
Edenville shares were trading up 14% at 32.00 pence each in London on Tuesday afternoon.
The thermal coal developer reported a return of "positive sentiment" and "business confidence" in Tanzania since Samia Suluhu Hassan became president in March.
In the past 12 months, steaming coal prices more than doubled in South Africa, reaching over USD130 per tonne in August, the company added.
The Tanzania-focused firm said it now expects to sell around 2,000 tonnes of washed coal in the coming month, with guidance rising to 3,000 tonnes per month through the remainder of the year.
Chief Executive Alistair Muir said: "It's pleasing to see this turn around in business activity and we look forward to seeing further growth in sales over the next few months. The recent increase in coal prices out of South Africa would suggest there will be significant opportunities to sell our washed coal into the East African states."
With prices and confidence rising, Edenville said it has received an order of up to 3,500 tonnes per month of washed coal for its Rukwa project.
From September onwards, the company expects the order to result in an average monthly delivery of 2,000 tonnes of washed coal.
A further order is in the offing with a customer in East Africa, who has requested a trial export shipment of 480 tonnes of washed coal.
If satisfied, the client has indicated that it could order up to 3,000 tonnes of washed coal per month, the company added.
On the other hand, a pre-existing order of 600 tonnes of washed coal per month has been delayed after issues with the customer's plant, Edenville noted. However, deliveries are set to restart later this year.
The company is scheduled to discuss power station supply options with the Tanzanian government in September. Meanwhile, Edenville plans to continue to pursue short-term contracts and opportunities in East Africa.
By Scarlett Butler; scarlettbutler@alliancenews.com
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