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AFR negotiates tariffs for Sese power station
MBONGENI MGUNI
STAFF WRITER

Australian junior miner, African Energy Resources, says it has entered into tariff negotiations with the planned off-taker of power from its Sese Integrated Power Project in the Central District.
 
The negotiations are expected to result in a Power Purchase Agreement (PPA) between African Energy Resources (AFR) and the yet to be named off-taker. The negotiations will hammer out the terms and conditions of a power supply contract
When complete, the Sese Integrated Power Project (SIPP) will consist of a 1.5 million tonne per annum (Mtpa) coal mine and a 300-megawatt power station.
"Preliminary discussions have been held on the tariff structure," the company said in an update this week.
"A transmission options study has been completed identifying multiple viable options to transmit the power.
"In addition, a joint project review committee (with officials from AFR and the off-taker) has now been established."
The finalisation of tariff talks will help AFR bring a proposal to potential financiers as well as significantly advance other aspects of the project including the coal mining activities.
The Australian company revealed that a recently completed pre-feasibility study had shown that the SIPP was technically and economically viable at current Southern African Power Pool prices.
"These outcomes provide a good level of confidence as the company commences the next phase of its studies, the Bankable Feasibility Study (BFS)," the update reads.
"The BFS scoping documents have been prepared with two leading consultants short-listed and sub-consultants identified. The study is expected to take six months to complete."
AFR could thus become the country's first Independent Power Producer, according to its development timelines.
Meanwhile, AFR says its coal export plans are steaming ahead with a 34-wagon trial shipment due to leave soon to test the rail route to the Mozambican port of Maputo.
In April, AFR made history by sending a 25-tonne coal cargo from Botswana to Maputo in a test of the route exports will take when the planned two million Mtpa coal export project takes off in 2015.
Recently, AFR managing director, Frazier Tabeart said the company is evaluating a 1,000 tonne trial shipment in order to "study the optimisation of current rail and port capacity".
"Rail simulation modelling has been completed to determine travel times, cost estimates and rolling stock requirements with results significantly better than expectations," the company said in its update.
"Rolling stock availability has been determined with several options identified and a former Botswana Railways operations director of operations employed by the company to assist in rail negotiations."
AFR has identified the port of Maputo as the preferred terminal with expansion plans proposed to increase capacity from a current four million tonnes to 20 million tonnes per annum.
Sese is the fastest-developing coal and power project in Botswana, having only been discovered in May 2010.
Within two years, the project has moved its resources to measured and indicated category, initiated various technical and geological studies, inked a power off-take agreement and tested export routes.







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