Greg Kinross, president CIC Energy
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CIC launches coal-to-liquid feasibility study
Allan Seccombe
Posted: Wed, 12 Dec 2007

[miningmx.com] -- CIC ENERGY has commissioned a feasibility study into a well-flagged project to convert coal into gas and liquid fuel at its massive Mmamabula project in Botswana where it is building a power plant.

Greg Kinross has been replaced as CIC CEO by Warren Newfield, the co-chairman of CIC and founder of Tau Capital Corp. Kinross will be the president of CIC. No reason was given for the change.

The coal-to-hydrocarbons (CTH) project has gone through a positive internal scoping study, which showed there would be “robust economics” for such a project, the TSX-listed company said in a statement.

CIC wholly owns a 2.3 billion tonne coal resource at Mmamabula. There is ongoing exploration, which will add to the resource, which is more than enough for the two-phase power generation project.

The feasibility study by Jacobs Engineering Group will be completed in the second quarter of 2008. Wood Mackenzie will conduct market study for completion in first quarter 2008 into the products that could be generated in the CTH project.

The $9.5bn power plant project will consume between 7.5 million and nine million tonnes of coal a year to supply a plant producing 2,200 megawatts to 2,400 megawatts, the bulk of which will go to South Africa and distributed by the Eskom power utility. Commercial operation will start in 2012.

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The Botswana government has approved an environmental study into building 50 km of transmission lines from the Mmamabula project to the South African border to link into that country’s power grid. Power lines will also link the project to Botswana’s Morupule power station.

CIC is joined in the energy project by LSE-listed International Power plc.

The second phase will replicate the first.

CIC is aggressively exploring the coal deposit because it is investigating not only a coal-to-liquid fuel opportunity but exports of metallurgical grade coal to South African industries, Kinross, then CEO of CIC, told Miningmx in July this year.

A 50 km rail link from the CIC project to the South African town of Ellisras would have to be built to facilitate the exports of coal to industries in that country, he said.