CIC Energy, the titanic energy company raised Botswana’s hopes this week at the Botswana Economic Forum as it indicated that it has an abundance of exportable coal resources which are expected to last for 40 years, making the Ministry of Energy a shinning example in the development of the country.
The company also announced the plan to build a power station and a rail-line that will link Botswana with the Namibian ports which will relief pressure from the South African port of Richard’s Bay.
“We are a landlocked country and the challenge is how we take our coal to the port,” Eddie Scholtz said.
The company said it will take advantage of Botswana’s dry port in Namibia while at the same time embarking on aggressive plans to construct a 2400 mw power station during phase 1 of the mining plan.
“We are going to build a 1 500 kilometers rail line which will connect Botswana to the Namibian ports,” he said, adding that the decision is still awaiting the environmental impact assessment study.
“Seventy-five percent of our power will be sold to ESKOM while the rest will go to the Botswana Power Corporation,” he said.
The company has drilled 2500 holes at its Mmamabula project, which is expected to cost nearly US $ 10 billion ÔÇô which is an envy of the commercial banks across the world. It is also planning to produce gas in the medium, while on the long term will produce fuel from its coal resources.
“We believe that there is a market because of China. The power purchase agreement is still being finalized and the rail line study is going into feasibility study.
“The US $ 9.5 billion power station will take 41 months of construction and we are looking at it to be up and running by the second quarter of 2013,” Scholtz said.
The development is expected to also trigger the resuscitation of the Activox project at Tati Nickel mine near Fracistown.
Speaking at the Southern African Power Pool executive meeting last year, Minerals and Energy Minister, Ponatshego Kedikilwe, said the impending power shortage is threatening to reverse the “development in the region particularly and not solely in the mining sector and will need power to keep us going”.
“The increasing imbalance between demand and supply is a regional one. And because it is a regional concern we have to join hands,” he added.
The Southern African region’s power surplus is expected to be depleted by the end of next year and it has prompted regional power utilities to embark on some frantic moves aimed at saving the region from a blanket black-out.
The situation is made worse by increased consumption, currently moving at three percent per annum and regional efforts aimed at phasing-out poverty, which unfortunately have added to the worsening problem.
“People want electricity to enjoy the industrial revolution that comes with it but at affordable prices,” Kidikilwe said, adding that “our people need electricity as early as yesterday.”
As part of the moves to get electricity to the people, the Botswana government has embarked a programme aimed at electrifying 100 villages with the hope that it can be used to fish people out of the poverty trap. Further, the country is putting in place plans to expand Morupule power station in a bid to meet the nation demand. The Morupule efforts are expected to be boosted by Mmamabula and Mmamantswe projects which are also aimed at supplying the region with electricity. The Mmmabula project will cost as much as P 60 billion to put up the mine and power station.
“To meet our power needs we need massive investment in terms of power generation and supply,” Kedikilwe said.
“The Mmamabula project is envisaged to significantly contribute to the regional power demands,” he added.
However, the issue of investment cost is expected to be reflected on the high tariffs structure which will raise another debate on the affordability of electricity in the country.
“This is a doubleÔÇôedge sword to producers, off-takers and consumers. The utility companies need to demonstrate a high level of efficiency to justify their tariffs,” he said.