IGC Resources begins feasibility study at Ngaka

2009-06-02 17:00 ET - News Release

Mr. John Braden reports

IGC REPORTS START OF BANKABLE FEASIBILITY STUDY AT ATOMIC RESOURCES INC.'S NGAKA COAL PROJECT, TANZANIA

IGC Resources Inc. has been advised by Atomic Resources Limited (ASX: ATQ), an Australian-listed company in which IGC holds a 28.55-per-cent interest, that:

Tancoal Energy (a special-purpose joint vehicle between the Tanzanian government (30 per cent) and Atomic's Tanzanian subsidiary, Pacific Corporation East Africa (PCEA) (70 per cent)), have formally commenced a bankable feasibility study (BFS) for its Ngaka thermal coalfields in southern Tanzania, which is focusing on three strategic components:

• Mining of thermal coal for export and power generation on site;

• Development and project financing of a coal gasification plant and a 400-megawatt (Mw) power station using clean coal technology;

• Development of a private public partnership with Tanesco (the Tanzanian government's electrical authority) for the construction of power transmission lines to connect the project to the Tanzanian power grid.

Atomic plans to commence mining at Ngaka within 12 months of completing the BFS and anticipates initial coal production rate of one million tonnes per year (Mtpa). During the three-year construction phase for the IGCC plant production will ramp up to two Mtpa. Project finance discussions have commenced with international investors and financial institutions in Europe, America and Australia.

The generating capacity of a 400 Mw power station in Tanzania will increase total electricity supply within the country by approximately 40 per cent. The Tanzanian National Development Corporation considers this project to be critical to national development