07 Jun 2018

Minergy Coal chief executive officer, Mr Andre Boje says developing African countries, including Botswana, should be allowed to mine fossil fuels.

Speaking at the 16^th annual Botswana resource sector conference onJune 6, Mr Boje said developed countries were developed on the back of fossil fuels and thus it was unfair for them to deny developing countries to mine their fossil fuels and benefit from the resources.

Instead, he said developed countries should increase cut backs to allow developing nations some space to benefit from such resources.

 He argued that Botswana coal had high quality coal that is economical to mine and had an excess of 200 billion tonnes coal reserves. “The question should be why the country is not mining this resource that has the potential to significantly transform its economy,” he said.

 He added that coal production had minimal impact on emissions as compared to coal consumption. “The coal industry has acknowledged the impact on the environment and worked for decades on clean coal technology such as Carbon Capture and Storage (CCS) and High Efficiency Low Emission (HELE),” he said.

 Modern coal, he said fired power plants using such technologies had reduced emissions to levels comparable to gas fired powered plants. Contrary to article on the Sunday Standard of May 2018 which suggested that coal production was the ‘culprit behind climatic misfortunes’, he indicated that Botswana cannot be compared to China regarding emissions. “Coal can and must be a significant part of the solution in Botswana,” said Mr Boje.

He indicated that in the World Energy Outlook 2016 report, the International Energy Agency forecast that coal would remain the largest single source of electricity generation through to 2040.

Also, he said coal still made up 41 per cent of global electricity generation and 29 per cent of primary energy demand, adding there were1 600 coal fired power plants either being planned or under construction in 62 countries which would, without older plant decommissioning, expand the world’s coal-fired capacity by 43 per cent. “Off and on grid renewables have a role but cannot support base load requirements. Base load to be provided by coal as the cheapest form of energy requiring the lowest capital outlay,” said Mr Boje.

On missed opportunities for Botswana, Mr Boje said Richards Bay Coal Terminal (RBCT) had a capacity of 91 million tonnes per annum (mtpa), Transnet Freight Rail (TFR ) had 82 mpta out of which 75million tonnes (mt) was railed in 2017 due to coal shortages.

“Botswana could have exported 7mt and in the process created more than 1 000 jobs, revenue of P5 billion, royalties of P126 million and taxes of P140 million,” said Mr Boje.

Thus, he challenged government to commit to driving investment in the logistical infrastructure, departments adhering to regulatory time frames, accelerated regulatory approval timeframes and reduce company tax to maximum 15 per cent for coal exporting companies as was done for coal producers supplying power generation.

He also said a one-stop shop for prospecting license and mining license applications could be established.

“We also need to review of the coal industry tax structure to negate the logistical disadvantage to RSA coal exports, focus on shortest lead time to market otherwise Botswana will miss the opportunities.

South Africa has the most sophisticated bulk handling facilities in Africa, link into it and Lephalale is 123km to Botswana main line, let us use it,” he added. Nevertheless, he said all was not lost as Botswana could still benefit from coal production. “Botswana can be a low cost, high quality coal producer and already international traders have turned their attention to coal from Botswana. Eskom in South Africa facing a coal cliff,” he said. Again, he said Botswana should explore opportunities into Africa over the Kazungula Bridge to Zambia.

Botswana Chamber of Mines CEO, Mr Charles Siwawa said mining in Botswana remained a viable option.

 Thus, he said significant infrastructure was being put in place to facilitate the development of the mining sector.

Some of the infrastructure, he said included the Ngamiland power transmission line that had been awarded and commenced.

“Mmabula-Lephalale (South Africa) railway line is being reviewed to see the viability of establishing a line to transport coal there. Commodity prices are encouraging,” he said. ENDS