Botswana Stock Exchange (BSE)/Australian Exchange (ASX) ÔÇô listed African Energy (AFR is continuing on the development of Sese JV Coal to Power Project (“Sese”) in Botswana, as an exporter of power to FQM’s Zambian copper operations, the latest Company updates reveal. AFR which currently owns a 39% interest continues to assist First Quantum Minerals Ltd (FQM), the majority owner of the Sese JV, with a number of commercial and permitting activities related to the development of Sese.
According to the February 5 communiqu├®, “The current activities at Sese involve negotiations with the Botswana Energy Regulatory Authority (BERA) for a Generation and Export Licence; as well as negotiations with Botswana Power Corporation for a Grid Connection and Use of System Agreement. Negotiations with Zambia’s electricity utility (ZESCO), for securing access to their transmission system to transmit power from Botswana (via Zimbabwe) to FQM’s Zambian operations in the Copperbelt, are part of the process. A maximum of 100MW delivered to FQM’s operations is the upper limit currently under negotiation.
“Furthermore, bringing on board other creditworthy off-takers for the balance of power available from Sese constitutes part of the negotiation process. They also involve dialogue with the Southern African Power Pool (SAPP) regarding the transmission of power from Botswana through Zimbabwe (“wheeling”) into Zambia. Amendments to the approved ESIA seeking have been designed to increase power output from 300MW to up to 500MW.”
The negotiations will also include implementation of the resettlement action plan (RAP) around Sese, under which 26 households will have their grazing rights, water bores and access trails relocated to outside the Land Rights Lease.
AFR also continues to pursue development opportunities for its Mmamabula West Coal Project, and continues to support TM Consulting as the potential developer and buyer of the Mmamantswe coal to power project, both of which are suitable for supply into South Africa’s 3,750MW Coal-Fired Independent Power Project Procurement Program (IPPP). Activity on these projects is currently low during the transition of ANC leadership in South Africa and ongoing restructuring of the Eskom board and management team. In late 2017 the Company also commenced evaluation of a number of new opportunities for base and precious metals projects, and will continue to evaluate such opportunities if they are deemed to have the potential to add to shareholder value.
The Company has implemented a number of changes to reduce costs and reassign personnel commitments in line with current activities. For instance, while one hand Frazer Tabeart’s role will change to Executive Director responsible for investor relations and business development, with a reduced time allocation, while on the other Bill Fry will fulfill the role of Executive Director, commercial with a reduced time allocation.
The Company intends to reduce total executive director’s fees by 45%. Fees will be reduced by 22% for non-executive directors. Non-executive directors Wayne Trumble and Philip Clark have indicated their intention to retire from the board, effective March 31, 2018. Both remain, however, available to provide services to the Company as consultants.
The reduction in fees outlined above, along with associated reductions in office costs and lower compliance costs due to the recent de-listing from the Botswana Stock Exchange will result in annual savings to the Company of approximately US$450,000 (~BWP4 million).