Wednesday, November 25, 2020

Botswana urged to move fast to use coal to diversify economy

As the fast rising titans of the global economy, emerging markets rely on coal to fuel their growth. Botswana has been cautioned to consider its timing to garner benefits from its coal deposits ultimately diversifying its economy.

Botswana has considerable coal deposits, one of the largest untapped potential reserves in the world. At over 212 billion tones, 77 remains in the hypothetical and speculative categories. It has been estimated that as much as two thirds of Africa’s coal resource is found in Africa.

Roman Grynberg, a senior research fellow at the Botswana Institute for Development Policy (BIDPA), said the commercial opportunities for Botswana exporting coal are certainly time bound.

In his publication, Coal Exports and the Diversification of Botswana’s Economy, Grynberg said the window of opportunity for coal development is narrowing with changes in relative energy occurring globally.

There are currently four known very large multi-billion tonne coal deposits on the eastern edge of the Central Kalahari Karoo Basin at Morupule, Mmamabule, Sese and Mmamantswe. Jointly, these four deposits could alone result in exports of what government officials believe could be up to 90Mt per annum, an export industry larger than that of South Africa’s 70Mt in 2010.

“The opportunities created by the future development of the coal industry are not inconsiderable. If the government moves in a timely manner decisions pertaining to infrastructure, considerable trade and commercial advantages exist in Botswana,” he said.

At present, there exist at least two potentially competing rail proposals one to Walvis Bay, on the proposed Trans Kalahari, and another alternative route is the Ponto Techobanine Corridor through Zimbabwe to Techobanine, south of Maputo.

Grynberg said, given the mushrooming of thermal electricity facilities in Asia with a commercial life of 30 years, Botswana can reasonably expect significant coal demand to support an export industry for the next 20-30 years.

He added that the significant changes in renewable energy policy in two of Botswana potential markets of India and China should not be overlooked.

“The rising global demand for coal creates a major and substantial opportunity to diversify Botswana,” he said.

The new deposits of coal are expected to form the basis for diversification in the mining sector. However Grynberg noted that even with exports of 90Mt/a of coal alone they cannot substitute for diamond revenues.

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