Botswana advised to turn focus to power generation not exports

JOHANNESBURG  – Given Botswana’s vast coal reserves, which were estimated at 200-billion tons, the country’s coal mining industry should seek to encourage investment and drive expansion in power generation, rather than ramping up its thermal coal exports over the next few years, research firm Frost & Sullivan mining, manufacturing and industrial automation programme manager James Fungai Maposa has suggested.

“The added power capacity can be exported to markets such as Zimbabwe, Namibia, Zambia, Mozambique and South Africa, over the medium- to long-term. Investment into expanding Botswana’s power generation sector will come as a welcome relief to the Southern African region where economic growth and quality of life has been hindered by the current power supply shortages,” Maposa put forward.

He added that Botswana should consider securing investment to increase its in-country demand for its extracted coal, as opposed to targeting the export market.

“Botswana’s coal miners can also enter into strategic partnerships with Sasol, which could result in the economy further beneficiating the extracted coal.

“Further to this, Botswana’s Mmamabula coal reserves are in close proximity to Sasol’s proposed Mafutha project, in Limpopo,” Maposa suggested, while adding that the country’s extracted coal could be transported to Limpopo at a comparably lower cost than transporting the coal to Walvis Bay, in Namibia, for the export market.

Maposa noted that, as the Southern African region was expected to increase its electricity demand over the next 20 to 30 years, expanding Botswana’s energy sector could prove a far more lucrative opportunity for the country than growing its coal exports.

Meanwhile, he indicated that investment into expanding the country’s rail infrastructure to facilitate exportation of extracted thermal coal was limited by coal price fluctuations, cyclical demand patterns and the exorbitant costs that needed to be incurred to construct the proposed railway line between Botswana and Walvis Bay.

The proposed 1 500 km railway line was expected to cost about $11-billion, close to 70% of Botswana’s yearly gross domestic product.

“In a global economy where investors are becoming more risk averse, securing the required funding to implement the planned project could prove a daunting task,” Maposa warned.

Botswana Chamber of Mines CEO Charles Siwawa on Tuesday indicated at the Coaltrans India conference that Botswana was likely to export 115-million tons of thermal coal in the next seven years and will “soon be issuing expressions of interest for the railway line.”.

He noted that Botswana, which housed the second-biggest coal resource on the continent after South Africa, planned to export up to 40-million tons of coal in three to four years.

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