The blocks are endowed with about 700 million tonnes of coal. Floated last June, the tender is part of recommendation of the Coal Road Map, the government's blueprint for maximising returns and monetisation of the country's estimated 212 billion tonnes of coal resources. In his Committee of Supply speech to Parliament this week, Minister of Minerals, Energy and Water Resources, Kitso Mokaila announced that the two prospecting licences had been awarded to the Botswana Stock Exchange listed mining conglomerate. "My ministry developed a tender based licencing criterion for the issuance of coal prospecting licences as part of Phase One of the Coal Road Map. The tender for the first two blocks, Mmamabula South and Central, was awarded to Anglo American Corporation," he said.
The two blocks sit adjacent to the 2.4-billion-tonne Mmamabula East coalfields which was bought by Indian company Jindal group from CIC Energy last year in an P860 million deal. In June 2012, the Ministry of Minerals, Energy and Water Resources put the Mmamabula South and Central blocks to tender after former owners of the rights, CIC Energy failed to develop the resource within the stipulated time.
Anglo is already a significant and active player in Botswana's mineral sector with an 85 percent ownership in De Beers, which in turn has a 50 percent stake in Debswana. According to previous owners CIC Energy, the Mmamabula South and Central blocks could hold 671 million tonnes of coal. The deposits could be sitting close to existing power, road and railway infrastructure, providing easier access for exploration and lower costs of extracting the coal. The Southern block, in particular, straddles the A1 highway and has been the subject of extensive drilling and measurement.
The idea for prospecting licence tenders for known coal areas in Botswana stems from a study by Wood Mackenzie in 2011. The study indicated that coal prospective licence holders were largely inactive in terms of exploration. The study noted that the inactivity was partly responsible for stunting the growth of the country's coal sector."Based on evidence provided by the DGS, it became apparent that just nine of the 41 companies currently holding leases are actively exploring at all and even active explorers are generally not exploring on all the leases they hold," the Scottish consultants noted. "This situation is obviously undesirable as the government would like to ensure that as much exploration as possible is occurring," the report said.
Anglo, which already owns a stake in Morupule Coal Mine (MCM) by virtue of being a shareholder in Debswana, is also actively involved in the exploration of Coal Bed Methane (CBM) gas in Botswana. Through its subsidiary Anglo Coal, the multinational company started exploring for CBM in Botswana in 2007, after it was granted 34 prospecting licences by government. The main exploration regions lie north of Nata, extending towards Pandamatenga and Kasane, but Anglo Coal also has permits to explore an extensive region northeast of the Okavango Delta.
According to Miningmx, Anglo aims to delineate gas reserves totaling at least four trillion cubic feet (tcf), which will be sufficient to justify construction of a dedicated synfuels plant.