The largely untapped coal industry in Botswana has resulted in Botswana losing over P6.5 billion in earnings through export. This is according the Andre Boje, CEO of Minergy – a coal and energy company which listed on the Botswana Stock Exchange (BSE) in April this year. He was speaking on Tuesday when announcing the company’s inaugural financial results for the year ended 30 June 2017. Boje, whose company owns Masama Coal Project located about 50 km north of the Gaborone, said the local coal industry could generate P6.3 billion in revenues and about P118 million in royalties and a further P173 million in taxes. However, some of the challenges faced by the industry are that logistical infrastructure is not suited to seaborne export initiatives at the moment, according to Boje. He said there is also lack of investment in coal specific projects compounded by minimal coal specific skills and perception that Botswana coal is uneconomical to export. But, on the contrary, Boje said in fact Botswana coal is more economical to mine than South African one because of lower strip ratios and cheaper diesel. In order to see some progress in the coal industry, Boje has advised that government should consider some incentives for the industry. This include lowering tax rates by for example imposing a 15 percent tax on significant profits than 22 percent on nil and also increase diesel rebates for mining companies. Regarding access to markets Boje said government must drive investment in the logistical infrastructure rather than wait for Trans-Kalahari which is too far in the future and focus on the shortest lead time to market or else Botswana will miss the opportunities. He said South Africa has the most sophisticated bulk handling facilities in Africa and therefore Botswana should link to it. While in the past reports have emerged describing how coal use is in decline and will eventually be substituted as a source of energy, Minergy sees opportunities in the industry.
Boje said the World Coal Association sees coal playing a crucial role in meeting global energy demand and coal still makes up to 41 percent of global electricity generation and 29 percent of primary energy demand. He said coal will continue to play a major role in delivering energy access and security long into the future. With regard to their project, which is situated at Mmamabula coal fields, Boje said they have made some notable progress having completed exploration programme resulting in improved results, in situ qualities, strip ratios and yields. The company has also carried out provisional mine plans and provisional infrastructure design. Minergy has been granted a Prospecting License (PL) for Industrial Minerals covering new access roads and Boje said they will finalise and submit mining license application to the Department of Mineral Resources this month while the Environmental Impact Assessment (EIA) is also being finalised in preparation for submission to the Departmental of Environmental Affairs (DEA). The coal company expects to be granted a mining license in the second quarter of 2018 and commence opening of box cut in July the same year. Meanwhile, the company has reported a loss of P19.6 million which it said is typical of a startup exploration group. Most of expenditure was channeled towards environmental and other studies with drilling and analysis also gobbling a larger portion of capital expenditure. Minergy earlier this year raised P72 million through private and public placement of shares which was used to finance operational expenditure and further exploration and evaluation of the Masama Coal Project.