d&d .says buy ccc up to ......... , page-26

Thanks GN - nice article on Botswana coal potential. Here's the pertinent part. I wonder if the company AC mentioned today is "Australian-listed Earth Heat Resources"?

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One notable source of potential revenue going forward that, until the past few years, has largely been underdeveloped and overlooked is coal mining , as well as the comparatively environmentally friendly production and use of coal-bed methane (CBM) naturally occurring methane gas trapped inside coal that once was considered a dangerous hazard. Admittedly, given that Botswana currently imports 80 percent of its 550 MW power demand, with the majority coming from South Africa which is dealing with its own shortages and will stop supplying its neighbours by 2012 the matter touches as much on security and sovereignty as it does budgetary concerns. Yet there are roughly 200 billion metric tons of coal reserves (largely located in the eastern Kalahari Karoo Basin, an extension of South Africa's Waterberg Coal Basin), that theoretically could be a vital source of internal power generating capacity, according to the Ministry of Minerals, Energy and Water Resources, as well as help reduce the country's dependence on imported power and also be transported for sale not only to South Africa, where Eskom, the government-run utility, still faces a coal shortage due to an inability to meet demand with domestic output - but to an export terminal on Namibia's Atlantic coast, where ocean-going vessels could be loaded quickly.

Until recently, though, the problem has centered on transportation, and at least one analyst (who asked for anonymity) blames the lack of capital stock squarely on the state. "The problem is that Botswana and its coal resources are landlocked. There is no easy way to transport these resources to ports for exports as the country does not yet have adequate infrastructure, and building such infrastructure is associated with great expenses," he wrote.

But that lack of investment may be a thing of the past, per the Southern Times, which reported in late September that "both Namibia and Botswana are in the midst of courting private companies to build the envisaged Trans-Kalahari Railway line stretching from Mmamabula coal deposits in Botswana's hinterland to Namibia's deep water port of Walvis Bay." Ultimately, proponents say, Botswana coal could be marketed internationally, across Europe, China and India. To date, four private companies have been actively exploring eastern Botswana's coalfields, including CIC Energy, Kalahari Energy, Aviva, and Saber Energy, part of the Tau Capital group that owns CIC Energy, while a fifth, Australian-listed Earth Heat Resources, will soon join the fray. [and Continental Coal - ed.] The companies will be engaged in projects, per a report, "ranging from coal mining, coal to hydrocarbons, a coal-fired power station, CBM production, a CBM-fired power station and the various fuel [spin-off] industries."

Moreover, the government seems keen on attracting further investors, revising its Mines and Minerals Act of 1999 that, while continuing to vest all mineral rights in the State, introduces a new retention license which gives it an option to acquire up to a 15% interest in new ventures on commercial terms, thus abolishing its free equity participation, which previously meant that, for significant minerals operations, it would tend to exercise a legal right to acquire an equity interest of 15% to 25% without compensation.


- so, (at least) two aspects hindering Conti's potential in Botswana seem to be getting resolved soon: sovereign risk & infrastructure inadequacies. Seems like a lot of money is getting pumped into Botswana coal/transport/utilisation now, and in the next few years. Excellent time to get those drilling rigs up and firing.

source: http://frontiermarkets.wordpress.com/2010/10/06/coal-industry-a-catalyst-for-botswanas-subpar-infrastructure-energy-dependence-and-one-note-economy/