South Africa finally cracks

“In 1982, we reached an agreement with Shell (on the Ksagwe coal project) that accomplished our objectives( to build the Trans-Kalahari railroad) : Shell subsequently carried out its obligations to develop a full feasibility study. However, even before we had finalised the agreement, energy prices had started to decline. The feasibility of the Kgaswe Project depended on a high and slightly rising price of coal, so Shell surrendered its right to the deposit after completing their studies . Perhaps, when energy again becomes scarce and valuable internationally our coal project will again become viable. It is an ill wind that blows no good.” HE Sir QKJ Masire ‘Very Brave or Very Foolish’ page 214

Now just imagine if President Masire had leaned across the table in 1982 and said to Shell ‘Look, we know that these coal deposits and the railroad  across the Kalahari are not viable at this price but we know that building a new railway to the coast is of such national importance to Botswana that we will fund it in part’. What would have happened? First, by now Botswana would almost certainly be a coal and base metal powerhouse supplying the global market from what would by now be a dozen or so different mines. Second, the down side is that there would have been long periods of time when prices of coal and other base metals like iron ore were very low and when the mines would have had to be shut and the government would have been left paying the interest charge and upkeep on a railroad that at the time was going through what was then a war zone ie Namibia or alternatively to Mozambique via Zimbabwe.  With each peak in energy prices we have had a lot of discussion of the railroad and each time we have missed the boat- last time in 2008 it was literally the boat to China.  There have been three major peaks of energy prices in the last 40 years.  One in 1973 with the Yom Kippur war in the Middle East, the second in 1980 with the  revolution in Iran and the third which President Masire was suggesting,  was when coal prices peaked at around $170/tonne in June 2008 with the boom in China/India imports. Coal prices are now running  at $76/tonne in June 2014 and instead of exports,  beneficiation is the word of the day. 

Botswana subsidising a railroad across the then SW Africa in the middle of a liberation struggle would never have been possible. But we have missed the coal price peak again and it is by no means obvious that there will be another one in the immediate future. Between the Iranian revolution in 1979  and the China/India peak in 2008 was a period of almost 30 years.

Editor's Comment
Congratulations Anicia Gaothuse!

The contest had 10 beautiful young girls as finalists and unfortunately only one could wear the crown.The judges picked Anicia Gaothuse. To all those who feel their contestant should have won ahead of Anicia for whatever reason, hardly; the judges found Anicia to be the best among the best, so desist from disrespecting our newly crowned queen on social media or anywhere else, for that matter! Each of the 10 beautiful young women had supporters...

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