'Govt to work with serious miners', Gabaake

| Friday September 17, 2010 00:00

The figures speak for themselves: firstly, Botswana is estimated to have no less than 300 billion tonnes of coal, which represents more than a third of the world's total coal resources. Secondly, all indications are that the golden '33 million carats per annum' era of diamond mining is in its twilight. Thirdly, domestic power demand is rising by approximately 10 percent annually and requires large investment in generation.

Coal has emerged as the elixir for a range of threats facing the Botswana economy that represents the elusive 'win-win' for the government and the private sector. The government expects to leverage on its decades of interfacing with De Beers and the expertise thus acquired to negotiate lucrative deals for Batswana.

For its part, the private sector hopes to tap into a resource whose price has barely receded over the years and whose demand continues to grow even in increasingly green Western economies such as the European Union and the US. So what's the problem?

Geologists, explorers, investors and developers increasingly agree that it is one thing to have the 300 billion tonnes and quite another to move the project from estimated resource to commissioning. Challenges in the project line include the exploration terrain, finance and access to markets, the latter epitomised by the private sector's refrain concerning the Trans-Kalahari Railway.

With 24 years of senior government experience under his belt, the Permanent Secretary of the Ministry of Minerals, Energy and Water Resources, Gabaake Gabaake, appreciates that establishing a coal mine can never be 'all in a day's work'. However, Gabaake expresses the prevailing government sentiment when he says tapping into the massive coal resources has become a national priority. To this end, Government, together with the World Bank, is developing a comprehensive roadmap for coal development that will assess issues of infrastructure, policy change and other factors impeding mine development.

'I believe it would be presumptuous to think we can come up with another Jwaneng and foolish on our part to think we could do that in the next 10 or 15 years,' Gabaake told a coal conference this week.

'We should be looking at assisting the private sector to develop the vast fossil fuels in this country and not in the next 20 years, but rather in the short to medium-term. Government stands ready and willing to work with those who are actually serious about mining.'

'Serious' is the 'active ingredient' to development of the massive coal resources, Gabaake hammered this into potential investors' ears, signalling that the government could no longer accommodate half-hearted efforts from the private sector to develop coal.

'I believe in action and creation of results,' he said. 'I'm always pushing towards the cutting of stories about how the coal is and instead moving towards tangible, sustainable projects that can deliver benefits to the people of this country.

'My message is that as a country, and as a ministry, we are open for business. If you come with projects that are solid, tangible and backed by figures, you will find that we are very willing partners. We are not looking for more ideas and definitions of coal or more talk about how beautiful the coal is.

'We want people to show us the next large source of revenue for this country. If we grant you an exploration licence, there's very little that will stop you from getting a mining licence. We don't put obstacles in your way, we just follow the legislation.'

Gabaake revealed that talk in government circles at one point was leaning towards the state moving to exploit mineral resources itself. 'We have been reluctant because we don't believe Government should be in that space (because) we feel the private sector should be dealing with the issues of risk,' he said. 'We are willing to work with the private sector especially in areas of infrastructure.'

Private sector jitters about the precarious power supply situation being a factor against coal mine development have also been eliminated. According to BPC executive, Lovemore Chilimanzi, several under-development projects, demand side interventions and continuing imports guarantee investors power for the development of coal mines.

According to Chilimanzi, the fact that peak power demand in July this year was lower than in July last year is more probably the result of the national rollout of CFL bulbs - currently 400 000 of the targeted one million bulbs have been installed - to replace incandescent light bulbs. When completed, the demand side intervention will save about 30 megawatts (MW) from the country's power demand of about 500 megawatts off peak.

Other interventions include the 90MW Orapa fuel station to be commissioned next month, the 600MW Morupule B Power Station due for commissioning in October 2012 and the 300MW Mookane Domestic Power Project, an independent project due for commissioning in 2014.Mike Nightingale, a 46-year veteran of capital intensive industries with various technical papers and reports under his belt, is confident that sustainable extraction of Botswana's coal resources is an imminent reality. Nightingale has also emerged among the first to review upwards the oft-repeated 212 billion tonne coal resource figure.

'This 212 billion tonnes was based on very old drills, very old standards and very invalid data criteria,' he says. 'I would not be surprised if we did trending and found that we should be heading towards 300 billion tonnes, and in terms of global impact, that is an incredible figure.' With the authoritative BP Statistical Review 2010 pegging proven global coal reserves at 826 billion (120 years of use), in the words of a professor at the Gaborone coal conference, Botswana 'could soon be the Saudi Arabia of the coal industry'.The challenge, according to Gabaake, is to stop talking and start doing.