Thursday, March 23, 2023

The Trans Kalahari Rail project – A Grim Tale

Following a series of clandestine consultations, a major railway line that will be connecting Botswana to the Namibian Atlantic coast is on the verge of being constructed. In March last year the Minister of Minerals Water and Energy Resources Kitso Mokaila, signed and sealed an agreement with his Namibian counterpart for the massive railway line infrastructural development project at Bird Island near Walvis Bay.

Botswana represents Africa’s exciting new coal and energy province, and has generated considerable buzz within the African and international coal, energy and investment industries. Botswana represents 66% of Africa’s known coal resources – over 210 billion tonnes (some suggest this will rise to over 320 billion tonnes), making it Africa’s second largest coal resource. Already the Takatokwane Coal project cost is going to gobble up P7.2 Billion.

The sole benefit of the Trans Kalahari railway project is to connect Botswana as a land locked country to Namibia’s terminus port of Walvis Bay. The railway line, which will be approximately 1,500 kilometres long will not only make way for a coal terminal, but will also be a key asset in unlocking Botswana’s vast coal deposits which were recently discovered. The construction of the railway line shall therefore unlock the value chain of coal mining in Botswana that will also unveil future opportunities for potential power generation for possible export within the Southern African region. Nonetheless, the railway line will benefit other landlocked Southern African Development Community (SADC) countries like Malawi, Zambia and Zimbabwe by providing alternative transportation routes. The massive infrastructure, which is slated to be complete in the year 2019, is estimated at approximately US$ 9.2 Billion (P136 Billion).

But however, it is slowly but surely becoming uncertain that the future for coal mining looks as rosy as it is being portrayed. International financiers such as the World Bank, International Monetary Fund (IMF) and African Development Bank (AfDB) are slowly turning away from financing coal related projects. The fundamental reason being that coal is seen as a threat to the environment because of its carbon emissions. Already environmentalists are working hard around the clock in order to ensure that Botswana’s rich coal deposits remain unutilised.

A report by the Union of Concerned Scientists (UCS) highlights threats from the impact of global warming to which the Botswana tourism industry should be paying close attention. The Okavango is one important land mark, as carbon emissions are likely to shrink the delta. It states that, “Coal plants are the nation’s top source of carbon dioxide (CO2) emissions, the primary cause of global warming.” It further mentioned that in 2013, the worldwide union of concerned scientists released a report which duly predicted that by the year 2015 utility coal plants at the Morupule A and B power stations, which are fuelled by coal, will have emitted a total of over 1.7 billion tons of CO2”.

The detailed report by the Union of Concerned scientists, which is an association of scientists who believe in disantestablishmentarianism reads, “UCS, an independent alliance of science analysts, undertook an in-depth study of the current and future impact of climate change on 30 at-risk heritage sites in Southern Africa. The group’s findings were released in a report titled ‘National Landmarks at Risk: How Rising Seas, Floods and Wildfires Are Threatening the Worlds’ Most Cherished Historic Sites.’

The report is a preliminary study which was made to see the future possible effects of global warming on the Okavango Delta which was recently regarded as being a world heritage site. According to the research, the Okavango delta is likely to shrink as a result of evapotranspiration. “Over the years, the delta is likely to get smaller due to global warming, as a result of rising temperatures and change of seasons.”

In a move to quell concerned scientists, the Botswana Chamber of Mines and the Ministry of Minerals, Energy and Water Resources, will in March host the Coal and Iron Ore Botswana conference from 24-26 March at the Grand Palm to discuss the possibility of coal becoming a future tool for economic diversification. Meanwhile, later on this year, Botswana is set to host yet another conference, dubbed Botswana International Coal and Energy Conference, of which the dates are yet to be announced. Delegates who are expected to attend the highly esteemed gathering will include the likes of Minister of Minerals Energy and Water Resources, Kitso Mokaila, Morupule Coal Mine, Anglo American, Bateman and other market players. They are expected to give yet another optimistic presentation of how important it would be to exploit Botswana’s vast coal deposits.

Economists who were engaged by Botswana government to do a post diamond study have suggested a wide range of options that could make the rail and port infrastructure non viable citing low coal prices in the future as a fundamental factor for the project as the commercial viability of export coal looks headed for a big slope in the future.

The Trans Kalahari railway project will run from Mmamabula to Walvis Bay. “Timing is a critical issue and the capital intensive infrastructural project will be done at a time when the market can or will sustainably support it,” adding that the government needs to consider what lies ahead in the future for coal. He added that, “Even if it were to have a passenger train, what would be the commercial benefits seeing no one wants to travel by train any more hence the collapse of the passenger train in Botswana some years ago, though it is currently about to be re-launched.”

Another report titled, Minerals and Energy Exports and Revenue Projections which was authored by University of Botswana lecturers, Dr Khaulani Fichani and Peter Freeman, states that, “Regarding rail and port infrastructure, future coal export projects and some copper and silver projects in the Ghanzi copper belt would rely on this therefore we believe that government should be a joint venture partner in order to ensure that future projects benefit.” It further suggests that, “we however caution that due to the scale and possible risks involved, government should conduct a thorough due diligence ahead of any participation in such large infrastructure projects.”

The detailed academic report also mentions that electrification of the rail line would make positive economic sense as it provides additional benefits including opportunity to convert coal which is unsuitable for export purposes to power generation. “Regarding access to water and power, we believe that a mechanism should be put in place where by the utility companies provide the service to a mining project on a cost recovery basis,” it reads. “This would eliminate the need for mining companies to make upfront payments for power, which would improve the pace of project development as well as their project economics.”


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