Minergy to list Masama coal project on BSE
Staff Writer | Thursday February 23, 2017 18:00
The Masama Coal Project is located in the southwestern corner of Mmamabula coalfield and Minergy says it can be mined at low cost and low risk.
“We will list a coal company in Botswana in the first half of the year that will aid job creation in Botswana, supply the regional coal market with high grade product and potentially take advantage of the buoyant international coal markets.
“In the initial capital raising before the listing of Minergy’s exciting Masama coal project, P70 million was raised by means of a private placement with selected investors. A further placement is planned for March 2017 as part of the Botswana Stock Exchange listing process. The company has further plans to list on the JSE in the latter half of 2017,” says Minergy CEO, Andre Boje.
The resource is near to existing rail, road and water infrastructure, and has significant distance advantages over existing competing suppliers to regional customers.
In addition, Boje says the listing on the BSE means that the people of Botswana will have another option into which to invest directly.
“We estimate that the total investment of the project will be in the region of P200 million,” Boje says. He says with the resource of 337 million tonnes (mt) high quality coal covering 120 square metres, this project offers great potential for the southern African region and possibly the export market. “As many primary producers of coal in the region turn their attention to the buoyant export markets, it leaves a gap for smaller producers to exploit.
The size of the resource also supports a scalable production, presenting an opportunity to provide export coal to traders who supply India, China, and Europe should international coal pricing remain at current levels.”
Initially, however, the Masama project will focus on targeting coal supply into Botswana as well as regional industrial customers and Independent Power Producers (IPPs).
Boje, founder and former CEO of Wescoal, who has many years of experience in the coal mining and trading industry says coal will remain the dominant energy resource for the foreseeable future, and foresees conventional coal-fired power providers working with renewable-energy power providers.
Minergy has already put in place a complete corporate structure with a functioning board, including local representation; executive management, an operations manager and a local full time manager are all in place.
The international price of thermal coal has experienced recovery from its low levels and is now trading in excess of $80 per tonne, up from $49 a year ago.
The listing and capital raising is taking place, in order for Minergy to raise capital to bring the resource into production.
“We expect that all Environmental Impact Assessments, feasibility studies and the approval of our mining licence will be in place by the first quarter of 2018,” Boje indicated. He went onto indicate management’s commitment to the payment of dividends from the 2020 financial year onwards, provided it is a prudent strategy in terms of cash generated and that production will commence in 2018 as planned.