SA state lender studies Botswana coal project

Staff Writer | Tuesday March 9, 2010 00:00

 

According to the Department of Geological Survey, the Botlhapatlou area is covered by three prospecting licences for coal all issued to Strata (Pty) Ltd. The officials said the area could possess coal and other related energy minerals such as Coal Bed Methane.

IDC Head of the Mining Strategic Business Unit, Abel Malinga, was last week quoted as saying preliminary estimates indicate that Botlhapatlou could 'contain more coal than Mmamabula,' which has an estimated resource of two billion tonnes. Malinga said coal from Botlhapatlou would be used to fuel South Africa's thermal power stations and reduce power supply imbalance in the region.

'We need more feedstock for our power plants. It's a huge resource, the same size if not bigger than what they're looking at in Mmamabula,' Malinga was quoted as saying.

Eskom, South Africa's state utility, faces a coal shortage as growth of domestic output is outweighed by demand, Brian Dames, head of generation, said. The reports said a lack of generating capacity and low coal stockpiles forced Eskom to cut power to gold and platinum mines for days in 2008, while South African homes were hit by rolling blackouts.

Botlhapatlou may also contain export-grade fuel that can be shipped on the proposed Trans-Kalahari railway line to Namibia, Malinga said.

'IDC is also looking for coal in Zimbabwe,' said Malinga.

Investors are concerned about power supply in South Africa, the biggest platinum and ferrochrome producer.Ferrochrome capacity growth in the country is unlikely in the next three years, 'courtesy of Eskom,' Merafe Resources Limited chief executive officer, Steve Phiri, was quoted as saying.

The IDC's Mining SBU provides financial and technical assistance for the development of mining, beneficiation and metals projects in South Africa and the rest of the continent. It also provides funding to junior and emerging mining houses and mining-related activities such as contract mining.

Amongst others, preference is given to projects that demonstrate economic merit, and show profitability and sustainability within a reasonable time frame.