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The agreement will come into effect once COVID-19 related restrictions are lifted.
The deal covers mining and processing activities at Rukwa, said Edenville Energy, also noting that under its terms ILTL will become a customer of the thermal coal firm. The agreement will also cover sales, marketing, offtake and an asset level loan.
ILTL will enter into a long-term coal supply agreement that involves the initial purchase of 3,000 tonnes of washed coal per month at standard market rates, which will increase to 5,000 tonnes a month over 12 months.
Edenville Energy said the deal would also enable it to leverage ILTL's logistics network and "expertise with respect to existing and potential customers" to improve the likelihood of securing long-term contracts. Edenville plans to monetise the Rukwa coal deposit via the development of a mine-mouth coal-
A loan agreement before the restart of mining operations at Rukwa will see the parent company of ILTL provide an up to US$1 million loan to Edenville Energy.
Edenville Energy will continue to hold the mining licence for Rukwa and will be responsible for mining approvals and compliance.
"This announcement heralds a new chapter for Edenville," said chief executive Alistair Muir. "I am confident we have now struck a beneficial arrangement for our shareholders, which we hope will set the pattern for our future strategic partnership with ILTL."
