BOTSWANA was hoping to develop six new coal mines and a rail link for exports, said Bloomberg News citing government sources and Charles Siwawa, CEO of Botswana’s Chamber of Mines.
Project finance for thermal coal projects is fast drying up, according to Siwawa, who said that Botswana could exploit “that window” in which countries with abundant coal resources could yet develop it and sell the fuel to coal-fired power in Asia.
“We have that window,” Siwawa told the newswire. “We have a lot of coal and even if we gain $10bn between now, and when they want us to stop, it means a lot for our economy,” he said.
Speaking during a virtual meeting of Chinese investors last week, Robson Mugomba, acting CEO of the Government’s Minerals Development Company Botswana, said:
“The country has good resources which are close to the surface. With the resources we have, we could offer potential investors really attractive opportunities.”
The state is now willing to put its own money into projects to ensure they get to production, according to Mugomba.
“These opportunities are subjected to detailed evaluation looking at potential returns,” he told the newswire.
“We check against our portfolio to see if there’s a path to funding these.”
Botswana woos Chinese investors as lenders shun coal
The southern African nation, the world’s second-biggest diamond producer, has more than 200 billion tons of untapped coal reserves, said Bloomberg News. To kickstart the industry, it has turned to investors from the largest global coal consumer, China, it added. Key to developing the projects is the construction of a rail link to South Africa of as long as 125 kilometres (78 miles) at a cost of $150m to $250m, said Bloomberg. The line, capable of transporting as much as 25 million tons a year, would channel coal to the South African rail system that runs to its ports.
The appeal to the group led by the Africa Guangdong Business Association comes as banks are increasingly shying away from funding coal projects because of its impact on global warming. Yet demand for the fuel, especially in Asia, remains high and prices have risen to a record because of tight supply. Botswana wants to take advantage of what it sees as a period when coal will still be in demand before being replaced by other cleaner forms of energy.
Rail Link
Key to developing the projects is the construction of a rail link to South Africa of as long as 125 kilometres (78 miles) at a cost of $150 million to $250 million, according to a slide presented to the Chinese investors. The line, capable of transporting as much as 25 million tons a year, would channel coal to the South African rail system that runs to its ports. While South Africa has had a substantial coal-export industry for decades, landlocked Botswana’s deposits have remained largely untapped. The Government does own the Morupule coal mine and has supported another operation, the Masama mine owned by Minergy Ltd. The state is now willing to put its own money into projects to ensure they get to production, according to Mugomba.
“These opportunities are subjected to detailed evaluation looking at potential returns,” he said. “We check against our portfolio to see if there’s a path to funding these.”
The Government is determined to press ahead even though it only has one 300 megawatt coal-fired plant in its 20-year energy plan. Funding from elsewhere may be hard to come by. China’s biggest lender, the Industrial & Commercial Bank of China Ltd., recently withdrew from a $3 billion coal-fired power plant in Zimbabwe after pressure from climate activists.
“Make no mistake, we all subscribe to a cleaner world,” Lefoko Moagi, Botswana’s minerals minister, told a local newspaper last year.
“But we believe that we just can’t leave an abundance of a God-given resource like that.”
Source: http://www.miningmx.com/trending/46741-botswana-hoping-to-build-six-new-thermal-coal-mines-with-govt-s-help-before-window-closes/ & http://www.bnnbloomberg.ca/botswana-woos-chinese-investors-as-lenders-shun-coal-projects-1.1627612
