Wednesday, January 26, 2022

Its coal or highway for Botswana, SA

While much of the world are now pushing towards renewable energy by ditching fossil fuels, Botswana and her neighbour – South Africa are not ready to let go of its billion tonnes of coal.

Botswana, generally a resource rich country recently granted a coal mining licence to a top Indian industrialist, Jindal Steel and Power. The company, announced plans to start a coal mine in the Mmamabula area, famed for its large deposits of coal. Jindal is looking at an annual production of 4.5 million tonnes of coal. Construction of the mine is expected next year.

While across the border, South Africa is found on the list of countries that have pledged to progressively phase out use of coal, on its ground, new coal mines are booming. Infact one of the power stations – Kusile, under construction is slated to be one of the biggest coal-fired plants in the world when it is finished.

Botswana non-Committal

While Botswana was party to the recent agreement in Glasgow, it did not commit to end the granting of new coal mining licences. However, the country says it intends to invest more on renewable energy.

Botswana has an estimated 212 billion tonnes of coal resources. While coal mining companies are struggling to find funding due to environmental concerns, there is demand for the product. Even more instructively, there is a sliver lining in the horizon.

The demand for clean energy sources has been a key factor in driving the coal bed methane market (CBM). Seen as a cleaner alternative, gas projects involve CBM recovery from underground coal resources during the mining operations. The extraction of CBM is carried out using vertical and horizontal drilling into the coal seams and eliminating the water content of the seam gas.

This has created opportunities for CBM projects to set up operations in the country, lured by the vast coal reserves and the critical shortage of power supply.

At the forefront is Tlou Energy, proprietors of Lesedi CBM project, the most advanced gas project in Botswana. The company made impressive progress last year, achieving sustainable gas flows, while negotiations progressed well with the government, and investors showing keenness to plough their money following good prospects.

South Africa gets some ‘aid’

On the other, Reuter’s news agency reported in late October that the European Union will launch a project with South Africa at the COP26 climate summit to speed up the country’s exit from coal. By the end of the summit, the neighbouring country said that had secured $8.5 billion in loans and grants from a group of rich nations to finance its migration away from coal. SA president – President Cyril Ramaphosa on Thursday however cautioned that the US, UK, Germany and the European Union (EU), offer to help his country’s transition from coal to clean energy, does not mean the African nation must accept any unfavourable terms.

“A negotiations team will be established between South Africa and the partner group of countries and we will have our own top class finance people drawn from the public and private sectors as well as trade unions to discuss these matters, if it even gets there.

“This process is expected to be finalised over the following months,” said Ramaphosa during a South African Parliamentary session televised by major news outlets.

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