Masama coal project targets export market

Isaac Pinielo | Tuesday May 9, 2017 15:12

The company’s directors are adamant that the project, which seeks to produce 2.4 million tonnes per annum for the export market, would be a success.

Minergy chief executive officer, Andre Boje told Mmegi Business that the current price of international seaborne thermal coal is around $80 per tonne, noting that South African prices are significantly higher than this at around R1,000 per tonne, which makes it a viable project.

He said for developing the project, a lower capital cost is envisaged, adding that a capital expenditure of P200 million is required to reach steady state mining.

According to Boje, with the resource of 347 million tonnes (mt) high quality coal covering 120 square metres, this project offers great potential for the southern African region and possibly the export market.

Minergy plans to build an opencast coal mine within 16 to 18 months focusing on delivering coal to the regional market including Botswana and North Western and Northern Cape provinces of South Africa. The mine also has a potential to expand coal supply for export market and power stations.

Company director, Leutlwetse Tumelo said currently they are focused on the mining licence application, which is in progress and expected to be granted in 2018.

He said the environmental impact assessment (EIA) has been initiated and is expected to be completed after 12 months.

He said further drilling programme and feasibility study are in progress, while also engaging with government departments.

He stated that exploration-drilling phase has been completed with discovery of high quality resource and potential of 2bt of coal resources with further exploration.

There is also a 71 million tonnes identified for open cast mining in two sections and shallow underground mining for remainder.

Further, in order to raise development funding for pre-development work and the development of Masama project, Minergy listed on the Botswana Stock Exchange recently, becoming the first mining company to list on the main board of the bourse. 

The company had received 408 applications for 1,858,200 out of the 50 million ordinary shares of P1 each on offer from invited investors.

The company managed to raise P72 million through private placement. With total issued capital of 376,024,867.