Debswana is speeding up the expansion of its wholly-owned subsidiary, Morupule Colliery, to match the fast-moving development of its biggest client, Morupule Power Station.
The Colliery's expansion will see it tap into previously unexploited resources to ramp up production from about one million tonnes per annum to 3.8 million tonnes, which will also result in expanded surface facilities. Adjacent to the mine, the Botswana Power Corporation has accelerated the Morupule B Power Station project which involves the installation of 4 x 150 megawatt (MW) units from the existing 132 MW capacity. With the BPC hoping to commission the expanded power station by 2011, Debswana is anxious to speed up the expansion of the colliery to support the increased coal requirements.
Further highlighting the urgent need to speed up the colliery's expansion, the Procurement and Engineering contractor for the power station's expansion recently started work on the contract following the release of P5 billion by Standard Bank and the Industrial and Commercial Bank of China (ICBC). For its part, Morupule Colliery is currently considering several financing options for the expansion project.
Debswana's Projects Director (Power and Coal Mining) Andrew Winterbotham said all hands were on deck to ensure that the colliery and power station's expansions were synchronised. "We don't have a lot of time and we are fast-tracking because the Engineering, Procurement and Construction contract for the power station has been finalised," Winterbotham said. "We are also moving to the design phase in 2009 for the colliery's expansion."
Negotiations between Morupule Colliery and BPC on price and quality of coal to be delivered from the expanded colliery are underway. Debswana will tap into its 30-year experience of coal mining in Botswana to catch up with BPC and synchronise expansions.
In addition, for the expansion, the company will not change its mining method or technologies it currently uses. Presently, Morupule Colliery is an underground mining method using continuous mining technology.In expanding, Morupule Colliery will tap into its estimated 83 billion tonnes of probable reserves that stretch from Palapye to Serowe.
The existing colliery is utilising a fraction of these resources situated about 10 kilometres along the Palapye/Serowe Road. The Debswana Projects Director revealed that the expanded Colliery will utilise coal resources located west of the existing operations.
Winterbotham said a final feasibility study and detailed engineering are underway at Morupule for the colliery's expansion. "Early works are already under construction and they include the water supply pipeline which will be commissioned this year," he said. "Also, temporary power supply is nearing finalisation while exploration drilling has been completed with results analysts pending."
Part of the water supply works involve the construction of a 750-metre concrete reservoir, construction of a pump station,
Exploration drilling involved 380 holes from which Debswana officials say results support the tripling of present coal supplies to Morupule Power Station. "While we drilled most of these holes, some of them are from companies that conducted exploration in this area as far back as the 1970s and 80s," said Winterbotham. "In the past three to four years, we have been drilling other holes around the existing operations and we have a lot of data on the resources available." Drilling has shown a substantial high-quality coal resource of about 2.2 billion tonnes on Morupule Main Seam, which the colliery can tap into.Meanwhile, Debswana has unveiled ambitious plans for the exploitation of the massive coal resources held in the Morupule concession. According to Winterbotham, these plans include a second power station, export coal and a larger open pit mining operation in the future. "A concept study for a second power station at Morupule should be done by the end of 2009," he said. "This would be an export power station and we would produce export coal as well. We are very excited about this project and we know that a lot of people will be positively affected by it. This second power station and export coal project will drive so many other industries in the future."
The concept study will focus on identifying export quality and power station quality coal, which will be fuelled by expanding the existing underground mine. The Debswana Projects Director said that several factors will be considered in expanding the underground mine and coal export project, both dubbed Morupule Colliery Limited (MCL) 2. "When you are getting into an export coal project, you are totally dependent on global coal prices and you have to look at the price projections," he said. "It's also important to get high-quality coal which has to be washed. Washing the coal also lowers the transport costs per tonne. We may also include a railway line to the west which we could consider financing with other partners."
MCL 3, another planned development of Morupule's vast resources, could involve developing a large open pit operation. This would enable the colliery to move to full resource utilisation and optimised beneficiation. Debswana hopes to seal commercial partnerships with BPC for MCL 3 and export energy in multiple forms to neighbouring countries in the future.