Botswana coal market ripe for development

With coal reserves in Botswana estimated at up to 200 billion t, the country certainly has the resources to meet the growth in demand anticipated across Africa. Furthermore, with a supportive government that has a strategic focus on job creation, especially in the coal industry, things are looking optimistic for a country that has traditionally been entrenched in the business of diamonds.

Andre Boje, Chief Executive Officer at Minergy, explains: “Botswana is a highly rated investment destination in Africa, with a long history of political stability and a well-managed and stable economy. The government has been investing in infrastructure, including trans-regional highways, railways and airports and has identified the export of coal as a significant opportunity.”

Speaking at the IHS Markit South African Coal Export Conference last month, Sadique Kebonang, Botswana’s Mineral Resources, Green Technology and Energy Security Minister commented that the 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 added 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 – a 390 million t opencast, low strip ratio mine in the Mmambula Coalfield, 50 km north of Gaborone – in July 2018, with the first saleable coal available in September 2018.

The management team at Minergy has significant mine development and operational experience, with a wide range of expertise in coal and energy markets across Africa and internationally. Boje is joined by CFO Morné du Plessis, Chairman Mokwena Morulane and three recent appointments, each with considerable experience in the coal industry, has bolstered the team further.

Gabotshwarege Tshekiso, a mechanical engineer with more than three decades of experience in the mining industry, he previously worked as a Director in the Department of Mines, responsible for the Gaborone and Francistown offices. Gabotshwarege was a member of the technical committee of the BCL Limited Board and holds a Masters degree in Mechanical Engineering. In addition, Dutch Botes, a mining engineer with over 30 years’ coal mining experience has been appointed as technical advisor, whilst Lynette Kruger joins as marketing manager, bringing 18 years of coal marketing experience across southern Africa.

Boje continues: “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 anticipate producing 1.2 million t of coal and will require approximately 300 employees directly and indirectly; as production ramps up, further employment opportunities will be created.

“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, 4 million t of coal was exported from South Africa to the African continent; this is forecast to rise to 38 million t by 2030 – presenting a significant opportunity for Botswana.”

Following a listing on the Botswana Stock Exchange (BSE) in April 2017, Minergy now plans to list on the UK’s Alternative Investment Market (AIM) in the latter part of 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.