(Sharecast News) - Ncondezi Energy updated the market on the integrated Ncondezi 300MW power and mine project in Tete, Mozambique on Friday, announcing a process to find an acquirer or joint venture partner.
The AIM-traded firm said the process was designed to identify potential organisations that would be able to fund and mine coal resources at the project, potentially unlocking shareholder value.
It said the project's power plant was continuing on a care and maintenance basis pending the process, and clarification on the potential for Chinese funding for the power plant.
Sustained high global thermal coal prices were creating a potential opportunity to exploit the project's four billion tonne coal resource.
Ncondezi said it would now focus its operations on delivering its 300MW solar photovoltaic project, and reposition as a "green and sustainable" energy developer.
"Following an internal review of the company's operations, the board has resolved to launch a process to identify a suitable organisation who can take the lead on further developing, financing and mining the company's coal resources whilst the company focuses on developing its solar project and renewable energy strategy," said chief executive officer Hanno Pengilly.
"This decision follows the ongoing delays in progressing the coal power project, strong export thermal coal prices and positive progress with the company's 300MW solar photovoltaic power project.
"Our development partner, CMEC, still has no clarity on when a decision regarding financing from China for the coal power plant will be made."
Pengilly said that with global demand for thermal coal at record highs, the company believed that identifying a strategic partner to fund and mine the coal could unlock significant value for all stakeholders in the near term.
"The current JORC coal resource which has been extensively drilled out is four billion tonnes of mineable tonnes in situ, with a measured resource of 120 million mineable tonnes in situ accessible at shallow depths as shown in the 2012 definitive feasibility study.
"This is more than sufficient to supply the planned 300MW power plant for its 25-year life and provide an attractive opportunity for coal miners looking to secure coal capacity that is fully permitted and ready to be mined from a proven coal export hub now.
"We believe that whilst the coal operations offer significant potential value, the further development of these operations would be better in the hands of others with access to coal financing and mining expertise."
Ncondezi had put its coal power operations on care and maintenance, Hanno Pengilly confirmed, and would focus on delivery of the solar project while the strategic partner process progressed in parallel.
"The solar project feasibility study remains on track to be delivered at the end of October, and we look forward to providing an update at the appropriate time."
At 1229 BST, shares in Ncondezi Energy were up 6.34% at 1.09p.
Reporting by Josh White at Sharecast.com.
