Scramble for Mmamabula licences draws 39 firms

Staff Writer
Thirty-nine foreign and local firms have paid a P10,000 non-refundable fee to bid for the approximately 700 million tonnes of coal in the resource rich Mmamabula area, BusinessWeek has established.

The Ministry of Minerals, Energy and Water Resources has put up for tender the Mmamabula South and Central blocks, known coal resource areas in eastern Botswana, which have previously been the subject of rigorous exploration.

The tender, which is the first of its kind in Botswana, is part of recommendations of the Coal Roadmap, government's blueprint for maximising returns from the country's abundant coal resources.

 On Wednesday, Department of Geological Surveys (DGS) director, Tiyapo Ngwisanyi revealed that 39 firms collected tender documents ahead of the June 30 deadline for the process.

Ngwisanyi outlined how the evaluation committee will separate the grain from the chaff.

"The evaluation criteria will entail analysis of the proposed prospecting programme which should include the quickest way to bring the resources to exploitable reserves status, coal marketing and utilisation studies," he said in a written response to BusinessWeek enquiries.

"(The evaluation criteria will also analyse) coal transport and export facilities studies, environmental studies and community involvement."

In addition, tenderers will also be evaluated on the implementation timetable of the proposed work program.

"This [implementation timetable] should be robust enough to bring the resources exploitation in the shortest possible time," the DGS director said.

"They will also be evaluated on the demonstrated technical ability to implement the programme, financial ability to fund the programme and subsequent infrastructure as well

as mine development."

Ngwisanyi said the evaluation committee would be convened once the tenders are opened. It is presently unclear when winners of the tender will be announced "because of the large number of tenderers involved," the DGS director said.

According to information from the previous holder, the two blocks potentially hold 671 million tons of coal and sit close to existing power, road and railway infrastructure, providing easier access for exploration and lower costs of extracting the coal. The southern block, in particular, straddles the A1 highway and has been the subject of extensive drilling and measurement by the previous holder.

Wood Mackenzie, the Scottish consultants who developed the Coal Roadmap late last year, noted that holders of coal prospecting licences were largely inactive in terms of exploration, thus stunting the country's coal sector.

Their findings influenced the DGS to institute stringent prospecting licence award protocols, particularly for areas where resources have previously been proven to exist.

In their study, Wood Mackenzie found that only nine of the 41 companies holding prospecting licences in 2011 for coal were actively exploring. "Even active explorers are generally not exploring on all the leases they hold," the consultants noted.

"This situation is obviously undesirable as the government would like to ensure that as much exploration as possible is occurring."



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