New company invests $15m in coal mining

Business Reporter | Tuesday February 12, 2008 00:00

Asenjo is a joint venture between Sentula Mining, Jonah Capital and Aquila Resources.
Sentula is a South African mining services company listed on the JSE while Aquila is an Australian resource company.

The company says the estimated coal resource at its Western Mmamabula, Lechana, Tshimoyapula and Dukwe projects is 6.7 billion tons.

In addition, it has five prospecting permits over a total prospecting area of about 2 200 square kilometres. It has invested about $15 million in coal exploration in Botswana.

Asenjo Chief Operating Officer, Malcolm Campbell, is quoted by Mining Weekly as saying Botswana represents an attractive and strategic opportunity for mining investors as it has a stable investment environment.

'With quality and substantial coal resources that are untapped, tapping into Botswana's coal resources places us in a good position, especially when there is an ever-increasing global demand for resources and energy.'

This untapped market also places Asenjo in a strategic position at a time when the government intends to fast track the development of its relatively under-exploited coal potential, which is estimated to be between 200 billion and 300 billion tons.

Botswana currently produces less than one million tons of coal a year. Campbell said Botswana has the resources to be a major coal producer and is taking the necessary steps to enhance capacity, expand and build infrastructure projects to accommodate future coal exports.

These projects include port expansions at Walvis Bay, Luderitz Bay and Shearwater Bay in Namibia and Luanda in Angola.

According to Campbell, the possibility to produce export-quality thermal coal may exist, and if all targets and projects worked accordingly, the construction of a power plant at its Western Mmamabula project could see the company generating 2 500 MW to 3000 MW of electricity.

The Western Mmamabula prospect emerged the preferred development option for the prospective power producer. The Mmamabula prospect contains an estimated resource of 4.11 billion tons.

Initial exploration and modelling there are scheduled to be completed by December 2008, while a pre-feasibility study is expected to be completed by March 2009, which is also when a target listing date should be identified.

Asenjo is also currently pursuing a licensing agreement with a technology provider for a coal-to-liquids project, with a pilot plant being constructed in China, partly to prevent any scalability issues.

The company has awarded a drilling contract on its Botswana tenements to Geosearch Botswana. Drilling at the Dukwe prospect began in January, with drilling at the Western Mmamabula will start as soon as access to the site is cleared.

The contract is for 300 boreholes, totalling about 3 000 m of drilling.