Mmegi Online :: Indian firm to invest P5bn to develop Mmamabula
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Last Updated
Tuesday 16 October 2018, 17:21 pm.
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Indian firm to invest P5bn to develop Mmamabula

* Firm to build 300MW power plant in two years.
* Process to delist CIC underway
By Staff Writer Wed 17 Oct 2018, 00:04 am (GMT +2)
Mmegi Online :: Indian firm to invest P5bn to develop Mmamabula








India's Jindal Steel & Power said on Wednesday that it would invest up to P5.5 billion to develop Mmamabula coal fields for both coal exports and power generation.Jindal is tying up an P855 million ($116 million) deal to purchase Canadian firm, CIC Energy, which holds rights to the 2.4 billion tonne coalfield.

According to Dow Jones newswires, Jindal director, Sushil Maroo has revealed that the company, which operates the largest coal-based sponge iron plant in the world and has an installed capacity of three million tonnes per annum of steel, aims to invest up to P5.5 billion ($700 million) in two to three years to develop a coal mine and build a power plant at Mmamabula.

"In Botswana, Jindal Steel aims to produce about 2.5 million metric tons of coal from the mines to run the proposed 300 megawatt power plant. "The company also plans to look at exporting coal from Botswana and work on 'evacuation' facilities in the next five years," said Maroo.

Jindal, which last month secured approval from CIC Energy shareholders and Botswana authorities for the acquisition, will also start the process of delisting the Canadian company within a week.  CIC has a primary listing on the Toronto Stock Exchange (TXS) and a secondary one on the Botswana bourse.

"The basic premise of taking the project is the huge opportunity in power business in Africa. Our effort will be to supply power in the region," Maroo told reporters in a conference call from Mumbai. Maroo was also quoted as saying the company is looking at opportunities to buy iron-ore and coking-coal mines overseas and would also look at setting up a project in Botswana to convert coal into liquid fuels. Jindal currently operates power plants of 2,298 MW capacities in India and plans to add another 5,000 MW of coal-fired capacity there. It also operates a 3 million metric tons a year steel plant in its home country.

It also holds coal-mining licences in South Africa and

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Mozambique and is eyeing more coal and iron ore projects in South America and Australia to boost its self-sufficiency in steel raw materials.

Last week, CIC announced that the deal is expected to close within the next two weeks and, in any event, no later than October 9, 2012, subject to the satisfaction of certain conditions, including approval by the Minister of Minerals, Energy and Water Resources.

This will pave way for the Indian giant to take over the Mmamabula energy coalfields to meet the company's high appetite for fuel to power its steel plants in the world's second most populous country. While Jindal will look to export some of the coal to India in the future, the company says it will build power stations in Botswana through its subsidiary, Jindal Power Limited (JPL). In July this year, JPL sought expression of interest from qualified companies for the design of two 300MW - 350MW power plants in Botswana and Mozambique 

Under CIC, the Mmamabula Energy Project was focused on building a 1200MW power plant with South Africa's Eskom expected to be the primary power off-taker. The deal is also expected to spur government into fast tracking the development of a new railroad to enable coal to reach ports in Mozambique enroute to India. 

Botswana can export as much as 1.7 million tonnes per annum to international markets using existing railways through Mozambique. With the huge coal appetite of mainly booming economies such as China and India's, Botswana plans to fully exploit its 212 billion tonnes of resources to become a top coal exporter in the next six years with the construction of a new railway line and a new port in either Namibia and Mozambique.

Through Mozambique, Botswana is 6, 000 kilometres away from India, while coal powerhouse, Indonesia is 5, 000 kilometres away. On the other hand, another top coal producer, Australia is 10 000 km away from India but only 7, 000 kilometres away from China.

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