Botswana, Moz in talks on future coal export railway and port

16th August 2013 By: Keith Campbell - Creamer Media Senior Deputy Editor

A high-level delegation from Botswana visited Mozambique last week and held discussions with Mozambique officials in the energy, mineral resources and transport sectors. The Botswana delegation was led by Energy Minister Kitso Mokaila and Transport Minister Nomofo Molefhi. “We are in Mozambique to strengthen cooperation with the Mozambique government,” a Botswana government source told the media in Maputo. “We have common interests in, above all, the integrated development of the two countries.”

Although a number of important topics were discussed, Mozambique government sources stated that the main issue for the land-locked Botswanans was the export of their coal through Mozambique ports. The Botswana delegation started its visit with a tour of the National Geology Museum, in Maputo, followed by a meeting with Mozambique Mineral Resources Minister Esperança Bias. Thereafter they toured the Port of Maputo, which is likely to handle Botswana’s first coal exports through the east-coast country.

That Botswana was interested in using Mozambique ports to export its coal first emerged in early 2009, when it was reported that Botswanan officials were studying the possibility. In particular, they were looking at using the Port of Matola, in Maputo province.

In 2011, the two countries signed a memo-randum of understanding (MoU), which, among other things, aimed at the construction of a deep-water port at Technobanine, in the Matutuine district of Maputo province. It also covered the construction of a 1 100 km railway line linking the two countries. Reports state that this line will run through Zimbabwe.

Existing railways linking Botswana to the coast do not have the capacity to handle the likely future flow of coal from the landlocked country.

The total cost of the new port and railway has been estimated at $7-billion, and the project will be a joint Botswana-Mozambique programme. In April, Mozambique Prime Minister Alberto Vaquina stated that his government was evaluating the concession regime for the construction of the port and railway. Last week, Bias assured the delegation from Gaborone that Mozambique was moving forward on the concession of a property in the Maputo port for the construction of a coal export terminal for Botswana. All that was required was for Gaborone to give the go-ahead for the project.

The other major topic of the bilateral talks was oil. There were several aspects to this theme. One was the development of cooperation between the two national oil companies, Botswana Oil and Petromoc. Another was the acquisition by Botswana of oil storage facilities on Mozambique’s coast for fuel destined for the landlocked country.

This fuel would be transported to Botswana using “alternative routes”, according to a Mozambique govern-ment source. A third aspect of these talks was the possibility of the two countries jointly buying petroleum products in order to achieve economies of scale. These possible areas of cooperation regarding oil are also covered by the 2011 MoU.

The Botswana government currently estimates the country’s coal reserves at about 210-billion tons. At the moment, only one coal mine is operating and it exports its coal through Durban, in South Africa (as well as to South Africa itself).