AFR seeks funds to advance coal projects

Staff Writer | Tuesday April 15, 2014 14:24

Through the placement, AFR’s major shareholder, Sentient Executive will acquire 14.9 million shares to take their ownership to a 19.9 percent stake. The capital raising will comprise a $1.5 million placement and a $3 million non-renounceable entitlement, priced at $0.085 per share. The Sentient group manages over $2.7 billion in the development of metal, mineral and energy assets across the globe.
”

The AFR directors are also showing their support, with entities associated with them agreeing to purchase 2.4 million shares in the placement.
Eligible shareholders will be given the opportunity to participate in the capital raising on the same terms as the placement via a non-renounceable rights issue, and will be able to participate in a shortfall facility and apply for new shares in excess of their pro rata entitlements under the rights issue,” reads the note.

Last month, AFR said that soon, it expects to finalise the Environmental and Social Impact Assessment and Phase One of the Definitive Feasibility Study for a 300 megawatt power station and a 1.5 million tonne per annum coal mine at its Sese Coal project.

Sese hosts 2.5 billion tonnes of coal, enough to support multiple 300MW projects for regional power. 
The company says that 
upon completion, it will submit a mining licence application covering enough coal for the full life of the 300MW Sese Integrated Power Project.

It also reiterated at the time that its consortium with Saudi Arabia incorporated company, ACWA Power International has been short-listed to submit a bid for the 300MW Greenfield Power Project.

The financial strength of ACWA is undoubted given its paid-up capital of around $1.4 billion - and ownership by eight Saudi conglomerates.
An advantage of Sese is that it is close to existing transmission grid and planned grid extensions, and is matched to power markets in Botswana and neighbouring countries.

AFR together with a South African BEE partner, are eyeing a 300MW deal to supply power to Eskom. Last year, the company said it has approached the South African power utility with a view to plug its 11,000mw power supply gap up to 2030.

Apart from power, AFR plans to export coal mostly to Asia. African Energy says that with the provision of more wagons by the Botswana Railways, Botswana can export as much as 1.7 million tonnes per annum to international markets using the existing route through Mozambique.

With the huge coal appetite of booming economies such as China and India, Botswana plans to fully exploit its 210 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 Namibia and Mozambique.