The benefits of using domestic coal resources to generate affordable electricity in African countries are often overlooked, Lemur Holdings CEO Prince Nyati said on Wednesday.

Speaking during a panel discussion at the Coaltrans Southern Africa conference, he highlighted that Madagascar, where Lemur owns and operates the Imaloto coal and power project, was highly reliant on hydropower to meet its energy needs.

However, a three-year drought had resulted in the need to generate electricity using diesel generators, with the diesel imported at great cost.

Nyati noted that this showcased the challenges presented by alternatives to coal for generating electricity.

He further pointed out that Madagascar had significant reserves of high-quality coal, much of which remained untapped.

For a country such as Madagascar, it would, therefore, be more prudent to capitalise on the indigenous coal resources, rather than pursuing alternatives that are unaffordable, difficult to source and were unlikely to help grow the economy, he said.

However, while he acclaimed the merits of coal, he also called for the more responsible use of coal in the energy industry.

He pointed out that Lemur was building a coal plant that used clean coal technology.

He encouraged investors to consider investing in Madagascar’s coal industry, but pointed out that there was also potential to export coal, as many of the deposits were close to port.

Nyati said that, once proper port and rail infrastructure was in place, there would be considerable potential for new players to enter the coal market in the country, with good quality reserves to be exploited.

Meanwhile, Botswana Chamber of Mines CEO Charles Siwawa told delegates at the conference that there were also opportunities to invest in Botswana, which boasted the second largest coal resource in the world, after South Africa.

He suggested that rather than consider Botswana as landlocked, investors should look at it as being “land linked” and connected to various countries that were exporting coal.

A proposed railway link between Botswana’s coal provinces and South Africa’s Limpopo province could further boost the transportation of coal for export from South Africa’s Durban and Richards Bay ports.