Coal is the future of power generation worldwide, emphasises Australian exploration company Minergy’s newly appointed CEO, Andre Bojé.

“Coal remains the cheaper option . . . and I believe that, while the commodity is currently struggling with a low price, it will soon pick up,” he states.

Despite the current adversities in the coal industry, Bojé, who was appointed CEO last month, hopes to hit the ground running this year.

“It is common knowledge that the coal industry is not in the best shape of late. Coal markets have weakened to such an extent that entering new ventures is considered unprofitable,” the former Wescoal CEO tells Mining Weekly.

Challenges aside, the Minergy plans to throw its weight behind the Masama coal project, in Botswana’s Mmamabula coalfield.

Bojé states that the project – covering about 700 km2 – is a high-quality coal asset that will be mined at low cost and low risk. Located near existing infrastructure and markets for its coal, Masama has a reported 2.8-billion-ton export-quality coal deposit, which is mineable through opencast extraction.

“The market points to the fact that it is not conducive to open greenfield projects to produce thermal coal for the international or regional market . . . Multinational mining companies are closing mines, so people have wondered why would we want to open one.”

Bojé notes that the answer is simple: “Power.

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“We looked at the asset, as well as Southern Africa and the Southern African Development Community (SADC) region as a whole, and have noticed a shortage of power. “The whole region’s power suppliers, not only Eskom, will struggle to keep the power on in future.”

Bojé maintains that the solution to the immanent power shortages is independent power producers (IPPs), as they can use coal supply to boost the SADC electricity grids.

“We have a large supply of good thermal coal waiting to be extracted and, should there be an upturn in the coal market and IPPs gain traction in the region, we want to be ready for it. While the market may currently not be conducive, it might just be a few years until demand for thermal coal rises again.”

Minergy has adopted a two-pronged approach to mining at the Masama asset. The first step is to undertake opencast mining and support the regional market. The second is to supply regional power utilities, as many countries in Africa are driving self-sufficiency in the production of electricity.

Bojé states that there is also an opportunity to export high-quality coal to Europe, Asia and India, where he believes the expanding middle class is a major driver of long-term global energy demand growth.

He notes that, in the short term, Minergy hopes to hone in on key areas within the Masama mining area, with teams currently in the region to establish where the majority of the resource is available.
“We wanted to identify a significant amount of resources within a focused area. When we have the resources, we will decide what to do with them, but that does not mean we have not been speaking to role-players in the international power industry. There is international interest in Southern Africa power generation,” Bojé states.

But, Minergy

is waiting for a strategic opportunity before mining will take place.
“We are looking for an IPP that wants to establish a power generating plant in Botswana. Our original idea was to export the coal, but the state of the market and the lowered coal prices have forced us to consider independent power production.”

Bojé believes that the shift towards renewable- energy resources remains advantageous and foresees renewable-energy power providers working with conventional coal-fired power providers, but maintains that coal will be the dominant energy resource for the foreseeable future.