Shumba Coal eyes regional power exports
Brian Benza | Tuesday January 21, 2014 16:30
In a statement to the local bourse, the company announced that it has concluded a scoping study into transmission solutions. It described options available to export power from the SEP to South Africa, Zimbabwe and Namibia. Shumba, which is majority owned by citizens, joins other firms such as African Energy and Jindal that are making strides towards monetisation of Botswana’s estimated 212 billion tonne coal resources through exports.
The SEP will be a 300MW power station with the full output injected into BPC’s 400kV high-voltage transmission grid at the nearby Morupule B 400kV sub-station.
According to the company, the study contemplates changes to the base case by scaling up the export volume by doubling the capacity of the SEP and thus increasing exports by 100%.
“The Botswana power transmission grid is interconnected via Phokoje substation to South Africa (at Matimba) and Zimbabwe (at Insukamini) at 400kV.
“The SEP can use existing high voltage transmission infrastructure to export power cheaply to South Africa, Zimbabwe and Namibia,” said Shumba in a statement.
Results of the study, according to the company show that transmission costs of SEP exports are lowest for South Africa and Zimbabwe markets and higher for export to Namibia. It was also established that there are no expected system constraints to address on the interconnections to South Africa and Zimbabwe that require investments or other interventions.
“In terms of the transmission options analysed for supply to Namibia, wheeling through South Africa would be the lowest cost option.
“This is an excellent outcome as it provides further support for the development of the Sechaba Energy Project as a low cost producer of power for consumption in the region,” reads a statement from the company.
Currently, the Sechaba Project has approximately one billion tonnes of thermal coal resources.
The company believes that due to the SEP’s proximity to the A1 highway, railway line and the existence of large resources of ground water and two river basins, the project is potentially well situated for the development of a mine and a power station.
A scoping study concluded in 2012 estimated capital expenditure for the coal mine at $200 million, based on a five million tonne per annum operation.
Last October, Shumba announced that it had entered into an agreement with Impact Minerals for the acquisition of four energy (coal) prospecting licences in Serowe. The aggregate purchase price payable for the Acquisition is $800,000(P7 million) and was to be discharged by way of the issue and allotment by Shumba Coal to Impact Minerals of $550,000 worth of shares. Shumba will also make a $2,000,000 cash payment to Impact Minerals upon the renewal of the prospecting licences and the approval by the Minister of Minerals, Energy and Water Resources.