Wednesday, June 29, 2022

Botswana’s coal paradox

Botswana’s appetite for coal seems to be at odds with her climate goals.

This came to light last week at the Investing in African Mining Indaba 2022, held in Cape Town, South Africa.

President Mokgweetsi Masisi who addressed the Indaba indicated to Reuters news agency that there were numerous inquiries from Europe for the supply of coal and that Botswana was willing to supply and meet the demand promptly.

With over 200 billion tonnes of untapped resources of semi-bituminous coal, it would make economic sense for Botswana to tap into these reserves as a way of propping up the economy which has been decimated by the Covid-19 pandemic.

However, this announcement is coming at a time when an increasing number of governments around the world are starting to transition towards renewable energy. Six months ago, Botswana signed up to shift and reduce the use of coal at the United Nations Climate Change Conference, also known as COP26, which was held in Glasgow, Scotland, under the presidency of the United Kingdom. However, Botswana chose not to sign a pledge to stop issuing new licences to mine the fossil fuel.

On their website, the International Energy Agency (IEA) states that “coal production is set to increase in Botswana, but exports remain limited and mainly involve trade with neighbouring countries”. Ember – a global energy think tank that focuses on accelerating the global electricity transition from coal to clean energy – lists Botswana among a dozen of countries which have a substantial number of planned new coal projects.

There will be economic implications for Botswana to suddenly do away with its vast coal reserves. Transitioning to green energy will be an expensive and a slow process for Botswana. Neighbouring South Africa will phase out coal in an agreement called the Just Transition, which will see $18 billion being allocated to the country to assist with the transition away from coal. However, Botswana is likely to face climate funding difficulties since it does not have a clear roadmap on how it intends to end the use of coal.

The Minister of Environment and Tourism, Philda Kereng who attended the High Level ministerial dialogue on Climate Finance at the COP26 noted that Botswana needs financial support to start climate initiatives mainly clean energy and adaptation. However it is reported that in the last few years, Botswana received no adaptation financing while South Africa received the most multilateral climate financing on the continent. Zambia, Tanzania and Comoros also received relatively high amounts of adaptation financing relative to their climate vulnerabilities, but the sums are still inadequate to meet their needs.

If Botswana proceeds to supply Europe with “50,000 tonnes a month” of coal as indicated, this would play a vital role in building Botswana’s revenue base and generate electricity. However, it’s not clear whether this will be viable in the future since the global market for coal is evolving. This year’s African Mining Indaba conference was held under the theme, “Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies”.

RELATED STORIES

Read this week's paper