Two weeks ago news broke that the United Kingdom (UK) was powered without coal for a full day since the industrial revolution in the 18th Century.
A question was asked if this was time to abandon coal? Minergy Limited, a local mining exploration company with a specific focus on generating power fired by coal would answer otherwise.
On Thursday last week it became the first local mining company to list on the Botswana Stock Exchange (BSE) and its Independent Non-executive Chairman Mokwena Morulane proclaimed that it intends to establish coal industrilisation in Botswana.
Prior to this listing, said BSE’s Product Development Manager Thapelo Moribame, the local bourse had a total of eight mining companies listed on it and out of the total market value of P420 billion of all companies listed on the bourse their market value was P355.6 billion.
Minergy Limited, she revealed, as the ninth mining company increased this value to P376 million. In the short term, as was said by the company’s Chief Executive Officer (CEO), Andre Boje the company intends to also list in the Johannesburg Stock Exchange (JSE) of South Africa.
Morulane observed that despite the abundance of coal in the country the commodity’s specific trading skills had been lacking in the industry, highlighting it as a gap Minergy Limited intends to fill.
The coal resource as revealed by studies is estimated at 212 billion tonnes. He pointed out that the existing practice has been exporting the coal and as such the trading skills present an opportunity to develop power supply from the company’s flagship project, Masama Coal Mine.
He added that the size of the resource provides scalability of the project for the long term. The benefit he spoke of regarding the project is that it is a “low cost, low risk” project which he noted will be open cast mining as opposed to underground extraction.
Masama Coal Mine is located on the southern edge of the Mmamabula coalfield in Botswana.
Minergy Limited is not the only company betting on the rich coal resource. Other companies include Shumba Energy, which is also listed in BSE; Tlou Energy, African Energy and First Quantum Minerals.
The Mining Weekly wrote last month that government awarded African Energy (Australian-listed) and First Quantum Minerals a mining licence for the Sese joint venture (JV) coal project from which a 300MW power station will be built.
It said that the mining license covers an area of 51.47km2 and 650 million tonnes of measured and indicated resource.
Last week Reuters wrote regarding the JV that the companies were granted a tax holiday of five years from its first year of operation and a reduced company tax rate at 15 percent rather than the normal 22 percent.
About half of the power from the plant will be supplied to Zambia and the rest to other users, said the article. It would appear from this arrangement that Botswana won’t have dominance in terms of being powered despite her own desperate power needs.
Between the UK and Botswana are two contrasting worlds as has historically been the case but perhaps what could be noted is that the commitment to industrialise coal in Botswana comes at a time when the world is moving away from this method of power generation and considering alternatives.
The UK, for example, plans to close all coal-fired power plants by the end of 2025 according to an article by Carbon Brief, a UK-based website covering the latest developments in climate science, climate policy and energy policy.
The article cited the UK’s Department for Business, Energy and Industrial Strategy (BEIS) as the source of the information. It remains to be seen if after tapping on the coal resource Botswana will hold its own against the tide.
Although it may be cheaper to generate power using coal it is argued that the final product is not as clean as its other alternatives are. For the moment it is obvious that the mentioned companies have an interest on the coal and plans are underway to tap into this resource.