Transcription of Finance News Network Interview with Intra Energy Corporation Limited (ASX:IEC) Executive Chairman, Graeme Robertson.
Joining me today from Intra Energy Corporation Limited (ASX:IEC) is Executive Chairman, Graeme Robertson. Graeme welcome to FNN.
Graeme Robertson: Thank you.
Firstly could you start by introducing Intra Energy Corporation, when did you list and what’s your focus?Graeme Robertson: Well Intra Energy is the new name for an old company named Atomic Energy, which was a uranium explorer in Western Australia and Eastern Africa. And it stumbled on some coal in Eastern Africa and started exploring the coal resource. And we became involved in November 2010 and we then changed the Board over the next three or four months, and changed the name to Intra Energy. And Intra Energy is now the listed vehicle IEC on the Australian Stock Exchange. We changed the Company from an exploring company to a production company and we achieved that during 2011.
Now you mentioned your interest in Africa, could you elaborate why you chose Tanzania?Graeme Robertson: Well Tanzania stood out. It was a rapidly developing country, current IMF (International Monetary Fund) GDP (Gross Domestic Product) analysis of Tanzania is 7.4 per cent growth, last year it was seven per cent growth. It’s a growing economy, an incredibly wealthy country. Natural gas being found offshore, the third largest gold producer in Africa, nickel, rare earths which is developing business and of course, coal.
And what is Intra Energy’s footprint in Tanzania?Graeme Robertson: Intra’s footprint is in the energy sector in Tanzania and we are developing a number of projects in that sector. Of course, we’re into coal fired power station and that’s one area of development in the country and we’re doing that from the base of two coal mining operations; one, Tancoal in the south and the other one, Tanzacoal in the north.
And at what stage are those projects?Graeme Robertson: Well Tancoal is in production, we commenced production in September 2011. We were supplying trial shipments of coal to industrial markets. We’re currently at a production which is moving into contractual production, mainly to the very large cement industry in Tanzania and Kenya. We also export the coal to Malawi and Kenya.
Now most coal companies design their operations for export but Intra Energy is looking at domestic and regional supply, what makes East Africa attractive?Graeme Robertson: Well East Africa is very, very attractive and I’ve been in the industry for a very long time. And I’ve always found from an operational point of view, you make more money out of the domestic markets than you do out of export markets. Export markets, you compete with other countries and that generally drives your prices down. You’re subject to the whims and fancies of economic conditions internationally.
In Tanzania and in the region itself you’ve got extremely high GDP growth. So, therefore, focus on East Africa is a focus which protects you from falling coal prices elsewhere because you have no competition, you’re the only coalmine there.
African economies are typically held back in development from insufficient electricity supply, what is the situation like in East Africa?Graeme Robertson: In East Africa it’s incredible. Take Tanzania for example, a population of 45 million people and installed electricity capacity of 1,190 megawatts of which only 600 is operating. It’s all hydro, its diesel and it’s gas.
So Graeme does Intra Energy have plans for adding to its resource base?Graeme Robertson: Well yes, we do have plans. We realise that the demand for electricity is thousands of megawatts for countries such as Malawi, Burundi, Rwanda, Congo, Uganda in Kenya, surrounding Tanzania. So, therefore, we need to increase our resources to a sustainable level where we can supply that electricity demand. So in Tancoal, we have 251 million tonnes of JORC resource and we intend to increase that to more than 500 million tonnes in this year. And we’re also exploring our Tanzacoal operation where we have 100 million tonnes JORC resource, which we hope to double/triple also in the next 12 months.
To your financials: What is your cash position and are you funded for the rest of this year?Graeme Robertson: Well in March of 2011, we had $33 million. We’ve spent $13 million developing the mine, $10 million buying the Tanzacoal mine and we have $10 million in our pocket. So we are funded for the rest of the year.
Finally Graeme, what would you like to see Intra Energy Corporation achieve in 2012?Graeme Robertson: In 2012 I want to achieve the upgrade of the resource, so we will have control of 500/600 million tonnes of JORC resourced coal, which would still be open-ended with further exploration. I want to finalise the power purchase agreement for the development of the 150 megawatt power station, because the power station would be a mine mouth power station and it itself, would consume about 400,000 tonnes of coal. The third area which we are working very hard on is the regional marketing and supply of coal, where we want to expand both our exports of coal to Malawi, to Kenya as well as to industries in Tanzania, to replace imported coal.
Graeme Robertson, thanks for the introduction to Intra Energy Corporation.Graeme Robertson: Thank you very much, it’s a pleasure.
Ends
