Sese power plant to cost P15bn
Brian Benza | Friday June 12, 2015 18:03
The project comprises 600MW power station and a 2.5 million tonnes per annum coal mine.
Speaking at the 13th Resource Sector conference on Wednesday, African Energy managing director Fraser Tabeart said First Quantum is increasing its stake in the Sese Integrated Energy Project from 51 percent to 75 percent for a further $12 million investment.
“At the moment we have water, environmental and surface rights approvals for a 300MW Project and 1.2 million tonnes per annum coal mine. The plan is to double the capacity to 600MW and 2.5 million tonnes per annum respectively. First Quantum will take about half of the power to its Zambia copper mine operations with the rest supplied to other markets,” he said.
First Quantum, which will fully fund the project, is expected to make the final decision on the scope of the project in early 2016.
FQM produces over 400,000 tonnes of copper per annum at Zambia’s largest copper mine, Kansanshi.
African Energy, according to Tabeart, is preparing to apply for mining licence with the government of Botswana. African Energy’s partnership with a major mining company mirrors similar developments in the rest of the local coal mining industry as most junior coal miners are looking to partner with larger companies with stronger balance sheets to develop coal mining and power projects. Most junior miners have balance sheets of under $10 million when it requires between $700 million and $900 million to set up a 300MW power station. Botswana junior coal explorer, Shumba Coal has partnered with a South African firm, Mulilo Renewable Project Developments, for the joint development of the Mabesekwa Export Independent Power Plant (MEIPP), which will export power to the neighbouring country.
The MEIPP is a 300 MW energy capacity project with a minimum 260 MW net supply, to grid after auxiliary and mine consumption. The project will entail building a coal-fired power plant with a captive coalmine, to take part in the South African Coal Base Load Independent Power Producers (IPP) programme. Last year, South Africa invited IPPs to submit proposals to build coal-fired plants as part of a string of initiatives aimed at ending chronic electricity shortages there.
Another coal firm Jindal, which owns 2.7 billion tonnes of coal resources in the Mmamabula coalfields, also recently announced plans to offload 74 percent of their company to South Africa’s Glendal Trading. Due to the depressed coal prices coupled with the lack of suitable evacuation infrastructure to the sea, most coal focused mining companies have shifted focus from exports to power generation.
Jindal, which was granted a mining licence in October last year plans to set up a 600MW power plant at Mmamabula with the off-takers likely to be from South Africa’s Eskom. There are potentially nine mines on the 2,7 million Mmamabula resources, with six of them earmarked to be underground and three open casts.