Botswana to supply region with coal-fired power - Merafhe

ONALENNA MODIKWA
Staff Writer | Monday October 25, 2010 00:00

Officially launching Morupule Colliery Expansion Project on Fiday, Vice President Mompati Merafhe said the success of the project would transform Botswana's economy from one heavily reliant on the goodwill of neighbouring countries for energy to one self-sufficient in power generation.

'Our country will be better-placed to one day return the goodwill by exporting surplus electricity to the neighbouring states,' Merafhe said.

'This should be our driving factor as we set in motion a process of expanding our coal mining and processing initiatives at Morupule Colliery.'

For many years, there was a surplus of electricity in the SADC region, and it did not make economic sense to invest in power generation then. However, due to economic and structural changes in the populations of the region over the years, the surplus capacity has been consumed and many SADC countries are experiencing power deficits, Merafhe pointed out.

The Vice President said the government had always taken keen interest in Morupule Colliery mainly because of its viability and strategic nature as a national asset. The fact that the government had injected P1.5 billion into the project that would see the country's coal production capacity grow from one million to three million tons per annum was a clear testimony of the importance the country attached to the need for self-sufficiency in power generation.

South Africa was expected to scale down its power exports to Botswana from 80 percent to 25 percent by 2012 and zero by 2013. It was therefore imperative for Botswana to look at alternatives to make Botswana self-sufficient in energy production. The expansion of Morupule was the first step towards a substantial and profitable future for the country's coal industry whose increased production capacity would secure power supply for the medium term.

The Vice President added that with its massive coal reserves, a developed infrastructure, proximity to the Morupule Power Station and world-class expertise, Morupule Colliery should close the gap within a short time. 'The coal within the colliery's mining and prospecting licence areas can provide feedstock for the country's economy for many decades to come,' he said.

'The expansion, therefore, acts as a catalyst for a series of further expansions and investments that will allow exploitation of the resource's full potential,' he went on. 'This will be realised through projects such as the building of a major new underground mine allied with thermal coal exports via the envisaged Trans-Kalahari Railway line.'

In view of the fact that the construction activities are behind schedule, the colliery has mitigation plans in place to ensure that the coal needed for the new power station will be delivered to BPC when required. This will be done through the creation of a stockpile that will start delivering coal to BPC by June 2011.

Morupule Colliery started operating in 1973 as a subsidiary of Anglo American Corporation with a production level of 137 tons of coal per annum. It supplied mainly BCL and a coal-fired power station in Selebi-Phikwe. Morupule's production increased after the commissioning of Morupule Power Station in 1982 and Botswana Ash operations in 1987.

Speaking at the same occasion, the Managing Director of Debswana, Blackie Marole, said the global economic downturn in 2008 and 2009 had affected Botswana because of a serious decline in the demand for diamonds in the US, prompting innovative mitigation actions to protect Botswana's economy.

Debswana owns Morupule Colliery.'Through God's grace and our resourcefulness, we came out of the tough patch down but not out,' Marole said.'The crisis was so severe that several companies across the USA, Japan and Europe collapsed and disappeared from the face of the earth. In some cases, companies had to be re-capitalised by governments or shareholders.'  He said it was praiseworthy that throughout the recession, Debswana remained afloat and went on to pay dividends to its shareholders.