Despite negative media coverage facing the mining of coal, Minergy CEO Andre Boje says the commodity is here to stay for the foreseeable future. In his report contained in the company 2017 annual report, Boje says renewable energy has proven unreliable for base load electricity supply leaving only the alternatives nuclear, hydro and coal. According to Boje, nuclear is prohibitively capital intensive while hydro is hamstrung by global water shortage leaving coal fired power generation as a suitable option. In addition, Boje says a large volume of coal continues to be used in numerous industry processes besides power generation. “Many of these processes are dependent on coal with no practical substitutes,” he said. The Minergy CEO says in the report that it is forecast that by 2030 the world will be short of 380 million tonnes of seaborne thermal coal due primarily to increase or at worst steady consumption, coupled with decreased production due to mines end of life, lack of investment and production cut back in China. It is reported that in 2016, four million tonnes of coal was exported from South Africa to the rest of the continent and the number is expected to rise to 38 million tonnes by 2030. Boje says Botswana has an important role to play going forward by utilising South African bulk handling facilities which is the most sophisticated in Africa. The demand for coal in the Southern African region is reportedly continuing unabated with prices escalating on an ongoing basis.
The July 2017 McCloskey Coal Report is said to have highlighted that South African coal prices are 51 percent higher than the same period in 2016 and there is a strong demand from the cement, industrial and paper industries. “This situation is driven by the demand exceeding supply as producers are focused on fulfilling their take or pay export agreements together with the lack investments in new projects or expansion of existing production facilities,” he said. Minergy, which listed on the Botswana Stock Exchange few months back, is developing Masama Coal Project in Botswana and expects to be granted a Mining License in April next year. The company expects to be in production by August in 2018 and believes it would be better positioned to take advantage of the Southern African coal market. Minergy’s initial production is planned for 1.2 million tonnes saleable coal per annum ramping up when required, as the project will have a capacity of two million tonnes per annum from first commissioning.