Coal news and updates

Coal explorers in Botswana are pressing ahead with plans to start production and use existing rail capacity to ports in South Africa and Mozambique instead of waiting for a line being built to Namibia, the mines lobby said.

 

“You cannot sit down and wait for the Trans-Kalahari Railway; that would be a disaster,” Botswana Chamber of Mines Chief Executive Officer Charles Siwawa said in a Jan. 21 interview in Gaborone, the capital. “The thing to do is to move on the available capacity and all of them are trying.”

 

Namibia, on the continent’s southwestern coast, and Botswana are jointly developing the 1,500-kilometer (932-mile) Trans-Kalahari Railway to transport coal from the east of the landlocked country to markets in China and India. Mozambique and South Africa, the world’s seventh-largest coal producer, have offered 20 million metric tons of annual railing capacity to Botswana.

 

Producers in Botswana will rail the fuel to the port in Mozambique’s capital, Maputo and Richards Bay in South Africa, Siwawa said, without providing more information. The coal terminal at Matola in Maputo has capacity of 7.5 million tons annually, Grindrod Ltd., the terminal operator that’s continent’s biggest shipping company, said on its website.

 

Richards Bay Coal Terminal Ltd., the world’s largest export facility for the fuel, is on South Africa’s northeast coast, with Glencore Plc as the biggest shareholder. Grindrod operates the Navitrade terminal at Richards Bay with RBT Resources (Pty) Ltd. and is developing this into a fully mechanized coal facility with eventual capacity of 20 million tons a year.

 

Excess Supply

 

The production plans come as global supply of the fuel exceeds demand. U.S., European and Asian price for power-plant coal, which Botswana has, the have fallen for four consecutive years, while the metallurgical variety, used to forge steel, has dropped for three.

 

“Sitting back and waiting for the coal price to improve is unwise, as we believe we have hit the bottom now and the only way is up,” Siwawa said. “Producing now would help them work out the logistics when the Trans-Kalahari is developed as you cannot simply wake up and supply the 60 million tons per annum it will require.”

 

Of the seven coal companies active in Botswana, two are at exploration stage and four at pre-feasibility. Jindal Africa, a unit of India’s Jindal Steel & Power Ltd. (JSP) received a mining license in August and plans to start production for export next year. Shumba Coal Ltd., Hodges Resources Ltd., Walkabout Resources Ltd., African Energy Resources Ltd. and Minergy Ltd. are among the companies.

 

 

Source: Bloomberg