Takatokwane coal project to cost P7.2 bn
Isaac Pinielo | Thursday January 22, 2015 17:00
A statement issued yesterday said the Perth-based miner’s operating expenditure is estimated between $43 and $57 per tonne Free on Board (FoB). The company stated that it had completed a scoping study confirming the robust development model for its Takatokwane project. The study was part of the ongoing pre-feasibility study modelled under the conservative production and pricing base case.
The conceptual operation at Takatokwane was based on two open pit strip mines, each delivering six million tonnes a year of coal. Some of the products would be upgraded through a modular two-stage washing plant, and the project was expected to deliver three saleable products.
The scoping study was based on the over seven-billion-tonne Joint Ore Reserves Committee-compliant resource at Takatokwane, with the mine design focused on a target mining area where 748-million tonnes had been classified as indicated resource. “It was always important that we understood the optimum profile for mining the huge Takatokwane deposit. We now know that we will be building large-scale, open cut strip mines employing drag-lines and rope excavators that will produce coal for many years to come,” said Walkabout managing director, Allan Mulligan.
While the scoping study had initially opted for a 12-million-tonne-a-year production rate, Mulligan noted that this could be significantly increased in modular extensions.
Based on the 12-million-tonne-a-year output, the Takatokwane mine was currently estimated to have a net present value of $850-million and an internal rate of return of 14 percent.
However, Mulligan noted that the development of the Takatokwane project remained dependent on the construction of suitable rail infrastructure to move the coal product.
Currently the Coal Development Unit of Botswana is managing the feasibility study of the Trans-Kalahari Railway project, which was expected to be complete by 2019-2020. Numerous companies are actively pursing the monetisation of Botswana estimated 212 billion tonnes of coal resources. Companies such as Shumba coal, African Energy, A-Cap resources, Jindal and Continental are at various stages of exploration In Botswana.
African Energy hopes to open a 1.5 Mtpa coal mine next year as part of the Sese Integrated Power Project. The project includes an initial 300-megawatt power station.
While African Energy is a near producer, Morupule Coal Mine is the country’s only operating coal mine. Morupule has already begun exporting the commodity to regional countries such as Namibia and South Africa.
Under its recently finalised expansion, Morupule increased its production from about one million tonnes of coal per annum to 3.2 million tones. Full capacity production can reportedly reach four million tonnes per annum.
Approximately 2.8 million tonnes of the production is tied to a 20-year supply contract with the adjacent Morupule A and B power stations, owned and operated by the Botswana Power Corporation (BPC).
Experts believe that with the current infrastructure, Botswana can export up to 1.5 million tonnes of coal per year.