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Coal firms to press ahead with production in Botswana

World Coal,

Coal explorers in Botswana are pressing ahead with plans to begin production and use existing rail capacity to ports in South Africa and Mozambique, instead of waiting for a line being built to Namibia, the mines lobby said.

“You cannot sit down and wait for the Trans-Kalahari Railway; that would be a disaster,” Botswana Chamber of Mines Chief Executive Officer Charles Siwawa said. “The thing to do is to move on the available capacity and all of them are trying.”

Namibia, on Africa’s southwestern coast, and Botswana are jointly developing the 1500 km (932 mile) Trans-Kalahari Railway to transport coal from the east of the landlocked country to markets in China and India. Mozambique and South Africa, the world’s seventh-largest coal producer, have offered 20 million tpy of railing capacity to Botswana.

Producers in Botswana will rail the fuel to the port in Mozambique’s capital, Maputo and Richards Bay in South Africa, Siwawa said. The coal terminal at Matola in Maputo has capacity of 7.5 million tpy, Grindrod Ltd., the terminal operator that’s continent’s biggest shipping company, said.

Richards Bay Coal Terminal Ltd., the world’s largest export facility for coal, is on South Africa’s northeast coast, with Glencore Plc as the biggest shareholder. Grindrod operates the Navitrade terminal at Richards Bay with RBT Resources (Pty) Ltd. and is developing this into a fully mechanised coal facility with eventual capacity of 20 million tpy.

According to Bloomberg, Botswana’s production plans come as global supply of coal exceeds demand. The US, European and Asian price for thermal coal, which Botswana has in abundance, has fallen for four consecutive years, while metallurgical coal prices have dropped for three.

“Sitting back and waiting for the coal price to improve is unwise, as we believe we have hit the bottom now and the only way is up,” Siwawa said. “Producing now would help them work out the logistics when the Trans-Kalahari is developed as you cannot simply wake up and supply the 60 million tpy it will require.”

Of the seven coal companies active in Botswana, two are at exploration stage and four at pre-feasibility. Jindal Africa, a unit of India’s Jindal Steel & Power Ltd, received a mining license in August and plans to start production for export next year. Shumba Coal Ltd, Hodges Resources Ltd, Walkabout Resources Ltd and African Energy Resources Ltd are among the remaining coal companies.

Edited from various sources by Sam Dodson

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