[miningmx.com] — Independent power plant developer Ipsa has scrapped a coal agreement due to delays in the implementation of independent power producer policies, the group announced on Friday.
The company said it had cancelled a coal agreement between its wholly owned subsidiary Indwe Power (IPPL) and Elitheni Coal, a subsidiary of Strategic Natural Resources.
The original agreement, which was announced in October 2008, envisaged that
Indwe Power would purchase about one million tonnes of coal a year for a period of 20 years for use at its power projects under development in the Eastern Cape.
“The board of Ipsa has decided that IPPL cannot proceed with the current coal contract,” the company said.
Ipsa continues to hold an option over a mine mouth site for a coal-fired power
plant at Indwe and intends to pursue power plant development based on clean coal in the Eastern Cape.
“Such developments will, however, have to be backed by bankable off-take
agreements,” it said.
In the meantime IPSA’s decision leaves Elitheni free to explore other options for
the sale of coal for power generation.