The recent signing of Botswana/Namibia Trans-Kalahari Railway (TKR) line development bilateral agreement will fast track the Walvis Bay Dry Port completion, enhance coal exploration foreign direct investment (FDI), unlock potential in the global export market and create employment for Batswana, top government official said.
Minister of Minerals, Energy and Water Resources (MMEWR) Permanent Secretary Boikobo Paya addressing delegates to the March 25 to 27 Coal Botswana 2014 Conference on behalf of the Minister Onkokame Kitso Mokaila in Gaborone said the run of mine (ROM) coal produced in Botswana is suitable for use in power generation.
“For quality export, the coal has to be washed as it is transported over a significant distance to reduce the ash content and boost the energy content, thus making it more economically viable on a cost per ton basis. The Coal industry in Botswana started in 1973 with the opening of Morupule Coal Mine (MCM). MCM’s production has been under 1 million tons annually (mtpa) for a long time, but has now increased close to 1.5mtpa because of supply to 600MW Morupule B power station, which is expected to utilise 2.2mtpa,” Paya said.
The commissioning of the 1500km-TKR line, an integral aspect of the Western Corridor, expected to start operating after 2019 should benefit from the Botswana/Namibia jointly owned Dry Port project enhancing viability by providing coal storage and export delivery excellence. Enhancement of the Western Corridor through the Dry Port augurs well for Botswana’s coal exports to meet the global demand for thermal coal for insatiable SADC market albeit, mainly driven by China and India whose imports continue to grow at a rate of more than 5% a year.
“Most of the thermal coal produced at Morupule Coal Mine is sold locally. About 22,800 tonnes, a one off export, was exported to Eastern Europe via the Durban Port between May and July 2013. However, Coal exports are expected to grow significantly once rail and port infrastructure is refurbished and developed.”
Paya added that the supply and demand of coal in Botswana is mainly Morupule B Power Station which is consuming thermal coal from Morupule Coal Mine. Demand is expected to increase once the other planned Power Projects are operational. This demand should be met easily by supply because of enough resources available. However, the regional demand for thermal coal is largely driven by the power deficit that is prevailing in Southern Africa. This means that a possibility exists in the future for Eskom to buy coal or power from neighbouring countries such as Botswana in case the local production is inadequate. Currently, South African coal producers are able to meet local consumption and export some of it.
According to Paya, Botswana’s minerals policy objectives (MPO) are to maximise the economic benefits for the nation while enabling private investors to earn competitive returns. The policy also focuses on creating a competitive environment to stimulate private sector investment in mineral exploration and exploitation, encourage linkages with the rest of the economy to expand value addition activities, generate employment and training for Batswana and safeguard the environment.
