(Alliance News) - Edenville Energy PLC on Tuesday said production has restarted at its Rukwa project following planned servicing and repairs on the main machinery and wash plant.
Edenville is a London-based thermal coal developer, focused on the brownfield Rukwa coalfields in western Tanzania.
Edenville shares were trading 36% higher at 15.00 pence each in London on Tuesday morning.
The company said the wash plant in particular has benefited from repairs and upgrades, after a complete overhaul was conducted in order to address historically poor performance.
Since production of coal recommenced, output from the plant has averaged 14.9 tonnes of washed coal per hour, consistent with the initially targeted cumulative monthly output of 4,000 tonnes per month.
Day-to-day operations at the wash plant are managed by Brahma Energies Ltd. Edenville said that further refinements to operations will continue over the next few weeks, as Brahma looks to optimise output and improve production rates.
With the plant now working properly, the company, in conjunction with Brahma, expects to enter supply agreements with new and existing clients.
The recommencement of production has coincided with a rise in global thermal coal prices, from USD125 per tonne a year ago to USD450 per tonne in 2022, which has positively impacted sales prices for Rukwa coal.
Edenville said it had identified a potential customer base in excess of the previously targeted 6,000 tonnes per month of washed coal, with pricing discussions now exceeding the previously outlined range of USD35 to USD50 per tonne.
The company is also conducting an inventory of spare parts amassed at the site to minimise any future downtime.
"With the company expected to be shortly turning cashflow positive on the basis of current production levels and anticipated supply agreements, I believe the outlook for Edenville and Rukwa is now more promising than ever before," said Chief Executive Noel Lyons.
By Holly Beveridge; hollybeveridge@alliancenews.com
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