Thursday, February 22, 2024

Shumba Energy signs coal supply agreement with unnamed consumer

Coal mining and energy development company, Shumba Energy limited was this week mute on the name of the company which has since signed a three year coal supply deal with it.

The unnamed company is said to have signed the three years deal which will see Shumba’s trading company, Shumba Coal Trading supplying it with over 20,000 tonnes of washed coal.

Shumba Coal Trading was established in 2015 as a result of the demand from future off-takers of the Shumba’s export coal products.

“SCT was founded to manage trade of coal from projects owned by the Company as well as other Botswana coal producers in order to develop and grow the market for low-cost, high-quality Botswana coal with regional customers”, reads part of the statement issued to the capital markets by the BSE quoted miner this week.

Mashale Phumaphi, Managing Director of Shumba Energy, comments, “The execution of the medium term coal supply contract is in line with the Company’s strategy of having a high proportion of contracted customers in addition to spot market customers. This approach will enable the Company to generate predictable and sustainable revenues whilst not prohibiting its exposure to the upside of rising market prices for thermal coal.”

Shumba’s announcement comes hardly week after its counterpart; Tlou Energy announced its decision to join the Botswana Stock Exchange (BSE).

Coal bed methane projects developer, Tlou Energy said that it plans to submit its application to the BSE listings committee for listing on the Main Board of the local bourse.

Through the listing, the company is targeting to have access to the significant pension investment funds that are available for development of Botswana-based projects.

Already the company is said to have secured a new cornerstone investor in asset manager African Alliance Botswana.

Through the selling of shares to African Alliance Botswana, Tlou Energy is expected to raise atleast P33 million. At the same time, the African Alliance subscription is said to be on condition that the listing on the Botswana Stock Exchange occur around mid-December 2017.

The company’s Managing Director, Tony Gilby said having local shareholders on the company’s register confirms the support for the project from within the Botswana investment community and becoming a Botswana listed entity opens further development funding options to the Company. 

“Tlou is focussed on building a new industry within Botswana, which will create new employment to support local communities”, Gilby is quoted saying.

Tlou Energy, which is also listed at the AIM and ASX bourses holds 10 Prospecting Licences covering an area of 8,300Km2 and is the first in the country to achieve independently certified Gas Reserves.

The company’s first planned gas-to-power solution is expected to be delivered through a 10MW pilot project. Following successful implementation of the 10MW pilot project, Tlou plans to upscale the plant in order to provide further power to Botswana and the southern African region having received a request for proposal from the Government to provide up to 100MW of CBM power from its Lesedi project.


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