BOSTWANA SEES COAL ALETERNATIVE TO DIAMONDS

Allan Seccombe [http://www.miningmx.com] -- BOTSWANA will soon launch a study into a 1,500 km rail link from its multi- billion tonne coalfields to a port in Namibia as part of efforts to diversify the economy away from its heavy reliance on diamonds, said Kgomotso Abi, director of Botswana's mines.
Botswana has coal resources of 200 billion tonnes but of that only three to five billion tonnes can be economically mined, Abi told the McCloskey South African Coal Exports Conference.

"We have very limited capacity for coal consumption, so we are aiming for the export market and we are looking at the international market," he said.
"Coal has the potential to be to Botswana what diamonds currently are to the country. We are more than just a diamond producer. There is coal that will uplift the economy of the country and secure energy for the nation," he said.

Apart from the single largest mining company Morupule, which mines around a million tonnes per annum to mainly feed a power plant, there are no other major coal mines in the country.

CIC Energy and Aviva are both busy with projects to build mines to supply coal to dedicated power plants that will supply electricity to South Africa and the region. They are also looking at tapping the coal export markets.

CIC has spoken of exporting some 440 million tonnes over the 30-year life of the project.

To grow Botswana's coal sector, the government recognises it has to assist in putting in the infrastructure to get it out of the country, Abi said, adding the Botswana government has talked to their counterparts in Namibia and both recognise the importance of the railway.

"At this stage we have short listed companies to come up with some proposals so we can do a prefeasbility to see if there is a business case," he said.
There are six short-listed companies, which will be narrowed down ahead of the start of the eight-month-long study in May. The World Bank is funding the study.

Dave Rennie, CEO of Grindrod's Freight Services Division, estimated it costs around $4m to build one kilometre of railway, putting the cost of the Namibian option, depending on whether the Luderitz or Walvis Bay ports are used, at some $6bn.

There is no existing railway crossing the Kalahari so it would be a completely new railway. The selected Namibian port would also need to build a new coal terminal.

Other options are for Botswana's coal to travel east to either South Africa's Richards Bay or Mozambique's Matola port in the capital Maputo. There could potentially be a new port called Ponto do Belo in southern Mozambique once Matola has reached its capacity, Rennie told delegates.

There are existing rail links, requiring relatively small investments to link the Botswana coal fields to the South African infrastructure and, if Mozambique is utilised, upgrading the railway to carry heavier loads.

Matola can handle four million tonnes. This will be increased to six million tonnes in the next couple of years and then upped to 16 million tonnes.

Rennie also referred to the Moatize coalfields in Mozambique, investigating the options to export coking and thermal coal. These are the ports of the shallow Beira, which needs dredging and terminal upgrades at a total cost of some $100m, and the more distant Nacala.

"I think both (dredging and terminal upgrade) will start his year. By September next year they should be ready with the railway line," he said. The 665 km line is undergoing an upgrade at a cost of $400m and it should be able to handle eight million tonnes a year.

It will take another $250m to upgrade the line to a capacity of 18 million tonnes a year. Investment of $300m would be needed to increase the capacity at the harbour to handle that tonnage, Rennie said.

The Mozambique government reckons the Moatize coal fields can supply 40 million tonnes a year from a resource of 3.6 billion tonnes. If all the tenements that have been issued come into production, it estimates $30bn will be added to the economy.

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