Botswana contains one of the world’s largest undeveloped thermal coal provinces, with the potential to supply world markets. This is according to African Energy Resources, which owns 100% of the Sese Coal and Power Project in northern Botswana.
Sese is one of the 15 delineated coal resources in Botswana. The entire resource is amenable to low-cost open pit mining and can produce large tonnages of both domestic power station fuel and washed coal for regional and export sales. The company is currently undertaking a bankable feasibility and environmental impact study for an initial two million tonne per annum mine scoped for delivery by end 2012, and has commenced marketing and sales negotiations with regional customers.
According to African Energy Managing Director Dr Frazer Tabeart, “the projects’ first electricity generation scheduled for late 2015 with the export project targeting sales of 5000 to 5500kcal/kg coal to Asia (India, China and South East Asia). Negotiations are underway for Power Purchase Agreement and EPC contract.”
Sese integrated power project is an initial 300MegaWatts plus 1.500Million tonnes per annum mine where African Energy has recognised an opportunity for power generation based on cheaply mined Sese coal. He pointed out a potential to unlock significant value from a very small proportion of the total Sese resource and noted opportunities present for both the export of electricity and domestic supply of electricity.
“Discussions with several off-takers for 300-600MW of new electricity generation capacity have also commenced and to date one memorandum of understanding has been signed for first 300MW power station,” said Dr Tabeart.
The Gazette Business understands that the MoU was signed in June 2012 under commercial confidentiality of which the parties agreed on the way forward.
The energy development company, which is listed in both the Australian Stock Exchange and Botswana Stock Exchange, intends to develop Sese through a series of stages aligned to markets and infrastructure. Stage 1 (two million tonnes per annum) will commence in 2013 and expand to Stage 2 (five million tonnes) in late 2015. Further expansions will be possible through improvements to existing rail and port facilities, stated Dr Tabeart.
The company, which has embarked on a long-term strategy to supply thermal coal to Asian markets, has successfully completed a 15,000tonnes bulk sample and 25tonnes rail shipment to Maputo. Dr Tarbeart said existing rail routes and ports are under evaluation by African resources’ consultants gauging the potential to significantly expand capacity on existing railways through staged investments. “We have also staged expansion of Matola Coal Terminal in Maputo to 20Metric tonnes per annum by 2018, plus expansions have been planned for a number of South African ports. Initial tonnage allocation at Matola has also been requested,” he added.
He noted the current supply gaps in many countries met by imports from Eskom, adding that these supplies are no longer guaranteed, therefore widening the gap between supply and demand in the entire SADC region. As a result, this was an opportunity for the company and Botswana to become net exporters of cheap electricity, he said.
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