Botswana is set to play a more significant role in both the domestic and African coal industries, says coal exploration and emerging coal mining company Minergy, claiming that the company is ideally placed to become the preferred supplier to coal consumers across Southern Africa.
The company plans to build an opencast coal mine at Masama, in Botswana, with the potential to produce 2.4-million tonnes of coal a year. A key focus of the company is to deliver high-quality coal to the regional market, including Botswana and South Africa, and enter the international seaborne thermal coal export market.
With coal reserves in Botswana estimated at up to 200-billion tonnes, the country certainly has the resources to meet the growth in demand that is anticipated across Africa. Further, a supportive government has a strategic focus on job creation, particularly in the coal industry.
“Botswana is a highly rated investment destination in Africa, with a long history of political stability and a well-managed and stable economy. “Government has been investing in infrastructure, including transregional highways, railways and airports and has identified the export of coal as a significant opportunity,” explains Minergy CEO Andre Boje.
Speaking at financial services company IHS Markit South African Coal Export Conference in Cape Town, at the end of January, Botswana’s Mineral Resources, Green Technology and Energy Security Minister Sadique Kebonang commented that government’s approach is to focus on the domestic use and export of coal, as well as the generation of electricity for domestic users.
He also noted that new coal export rules, as well as specific government focus on investment and infrastructure are providing new life and growth for the industry in Botswana.
Boje echoes Kebonang’s views on the opportunities for Botswana coal and is looking to the future, with Minergy expected to start mining coal from its site this year.
Minergy has a 390-million- tonne opencast, low strip ratio mine in the Mmambula coalfield, 50 km north of Gaborone. Mining is expected to start in July, with the first saleable coal to be available in September.
“The Masama coal project represents an exciting opportunity for the development of a small- to medium-scale coal mine in Botswana. “During the start-up phase of production, we expect to produce 1.2-million tonnes of coal and will require approximately 300 employees directly and indirectly; as production ramps up, further employment opportunities will be created,” adds Boje.
Minergy further plans to list on the UK’s Aim later this year. Listing on Aim will help Minergy to raise long-term equity finance to fund future growth and enable the business to reach its full potential with the Masama coal project.
“Although the new government in South Africa has made significant changes to the business landscape, it’s likely to take many years for the investment in coal to result in new coal mines. “ In 2016, four-million tonnes of coal was exported from South Africa to the African continent; this is forecast to rise to 38-million tonnes by 2030 – presenting a significant opportunity for Botswana,” Boje concludes.