Tuesday, May 17, 2022

Botswana coal miners may go underground to find best export product

Aurecon, the consultants engaged by Botswana government to find ways to go about the multi-billion Pula Trans Kalahari Rail Project (TKR), said local coal miners might be forced to mine underground in order to find the best product destined for outside market.

In the report released late last year, the Australian company pointed out that raw coal resources in the country can be described as having high ash levels, low to moderate energy and high sulphur.

Therefore, the consultants revealed that higher quality export coals could be produced from Botswana’s raw coal but may incur significant yield losses and consequently higher than desirable production costs.

“Underground mining is more expensive (approx. $25 per tonne ROM) but miners are able to target only the best seams and it yields at higher proportion of coal per tonne of ROM lower the proportion of waste from the mining,” Aurecon said in the report.

Equally, the production of high quality (6000+ c/kg) requires additional washing and creates significant volumes of middlings.

“The major disadvantage of underground mining and pillar mining is that it leaves 30%+ of the coal behind (as pillars) and therefore a much larger resource is required for any given output level”.

The 200 billion tonnes Botswana coal resource is typically deposited in a number of seams at varying depths with coal quality varying across these seams, with the higher quality coal typically lower in the deposit.

The coal miners will therefore at a high level use two mining techniques namely the underground (bord and pillar) and open cut.

“Open cut is cheaper (approx. $12 per tonne ROM) but miners clear all seams and it produces a significant amount of waste product and/or low quality coal”.

They said the capital costs for open cut are low because of the relatively shallow seams and an assumption that miners do not use longwalls for underground mining.

Aurecon revealed it used assumptions to estimate the cost of mining in Botswana based on information supplied by the miners and experience from similar South African mines.

The consultants said benchmark quality export coal can be produced but only if there is a domestic market for the low quality ‘middlings’ by product.

According to Aurecon, the high quality export / middlings option is potentially attractive to miners if the middlings can be sold to a relatively close (preferably mine mouth) power station because it maximises the price for export coal and minimises the proportion of output that has to be transported to a port.

“If all the miners took this strategy, a much higher ROM output would be required if 60mtpa of export coal were to be produced and the middlings output would be in the order of 20mtpa”.

“If the middlings are not sold then the average cost of producing benchmark export coal will rise by 20%-30% and become uneconomic”.

As a result it is anticipated that the majority of producers will blend to produce a higher volume mid range ~5,500 c/kg.

The P136 billion TKR project will run from Mmamabula to Walvis Bay and already it has been delayed and costs increasing every year.


Read this week's paper