Sunday, November 29, 2020

Dispute over Morupule land delays new coal mine

Morupule Coal Mine (MCM) has outlined its main reasons for objecting a proposed revision of the farmers’ compensation in an ongoing land dispute between the coal mining company, Ngwato Land Board (NLB) and some six farmers.

The company said last week that, under the new compensation proposals, there was an unwarranted departure from the principles adopted in the guidelines, which formed the basis for agreement with the initial 160 farmers.

MCM says attempts to resolve the land dispute on compensation by referral to arbitration have been futile as both the farmers and the NLB rejected proposals for same.

Chief Communications Officer at MCM, Boineelo Seitshiro indicated that the coal mining company continues to explore all possible avenues to resolve the dispute, “as soon as possible and to prevent any further delays to the Project, which is crucial to the long-term power needs of the country.”.

According to Seitshiro, the delay to the project will have significant cost consequences for MCM and other parties involved in the Project and Morupule B.

MCM holds a mining licence over tribal land in Botswana, falling within the jurisdiction of the Ngwato Land Board where it intends to develop a new open cast mine which will supply an upcoming extension of Morupule B power station with coal.

As part of its efforts to acquire the targeted land from a certain group of farmers, Ngwato Land Board, which is also the custodian of the affected tribal land, is said to have conducted a new assessment in respect of compensation payable to the affected farmers amongst them former cabinet minister Boyce Sebetela.

The new figures suggested by the Ngwato Land Board have since been rejected by MCM on grounds that it will serve as a deterrent for any future project as the land acquisition would make it cost prohibitive.

“The compensation rates used were significantly higher than the rates used regularly in the market. For example, the rates used to assess brick and mortar properties were, in the case of some farmers, more than five times greater than market value”, reads part of the MCM statement released late last week.

Sunday Standard has been informed that MCM is encountering difficulties to secure surface rights for the open cast mine which is expected to supply a total of 1.35 million tonnes of coal at 100 percent to the Independent Power Producer (IPP) per annum.

A financial close for the agreement between the Botswana Power Corporation and an unnamed Independent Power Producer (IPP) was expected to be by the of July 2017, the same time that MCM is expected to have secured surface rights to commence the project.

As per a detailed timeline of the project, the process of clearing the land as well as construction of access roads is expected to commence in October this year whilst the earthworks and infrastructure contractor is to commence operation on site by January 2018.

However, due to the delays brought up by MCM’s failure to secure surface rights, the project, including the financial close for the IPP transaction might not be achieved.

Sunday Standard has been informed that the lenders of the IPP could insist on proof of surface rights before financial close which will in turn delay commencement of the whole project.

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Sunday Standard November 29 – 5 December

Digital copy of Sunday Standard issue of November 29 - 5 December, 2020.