UK miner Baobab Resources says it will jointly commission, with Mozambique’s publicly owned electricity company, EDM, a detailed study for the power needs of its pig-iron project in the western province of Tete.
The memorandum of understanding follows the Mozambican government's unconditional approval of Baobab's environmental impact scoping report.
Baobab is examining a range of scenarios that could see Mozambique host the largest pig-iron operation in the world.
It is planning to produce low impurity pig-iron using ore from its Tenge/Ruoni deposit in Tete and locally mined thermal coal. It is currently focusing on the feasibility of building a facility to produce two million tonnes of pig iron per year.