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Coal miner, Minergy to triple production, exports this month

Publishing Date : 12 August, 2019


The Botswana Stock Exchange (BSE) listed company, Minergy, has set its sights on increasing its coal production and exports from the current 39 000 tonnes per month to 110 000 tonnes this August at its Masama Coal Project in the Mmambula Coalfield.

Buoyed by the high demand for industrial coal supplies in neighbouring South Africa and Namibia, Minergy said it envisaged that a steady state of operations will be reached next month. In an operational update on the company released this week by the Minergy’s new chief executive, Morne du Plessis, the company said demand for coal was high as a result of the short supply of coal specifically into the South African industrial market.  

“From August this year it is envisaged that Minergy will be mining 110 000 tonnes of run mine (ROM) per month.  The same quantities will be put through the washing plant and this should result in saleable coal of between 70 000 to 80 000 tonnes, increasing to 100 000 tonnes per month next year.  It is envisaged that a steady state of operations will be reached in September 2019,” du Plessis said. He said the mining company, situated 50kms north of Gaborone, had in excess of 340 000 tonnes of coal exposed and only need to be blasted, equating to three months of feedstock.

“We have come such a long way and are pleased with developments at the mine site.  We are extremely excited about the future of the project, our ability to supply coal in the region as well as our capacity towards a viable coal sector in Botswana. “The mine is now fully operational, producing saleable coal.  The Masama Coal Project has an excellent quality coal product within sustainable coal seams, and as such, has received significant interest from regional companies.  Minergy has successfully moved product to South Africa and Namibia.  The smaller Botswana market is also targeted and Minergy believes it will be able to provide competitive pricing,” said du Plessis.

Market for the coal product was readily available in South Africa where production has declined by 20 million tonnes as some coal mining companies stopped production and demand increased. “In addition, it is believed that Eskom will suffer a shortfall in coal supply of 470 million tonnes by 2030.  Large players in the sector, Anglo American and South 32, are respectively withdrawing from the coal sector and disposing of their coal assets, meaning the supply will tighten even more,” the Minergy CEO added.

Minergy was also exploring various options for off-take, ranging from longer-term agreements for the “finer duff product to spot deals for the bigger fractions”. “The big-ticket items have been spent.  These included ensuring the mine had power and water, and that the mine box cut and the processing plant were established.  For the next six months all that we foresee is spend on water, new road construction and the maintenance and surrounding roads to the mine,” he indicated.

On funding, du Plessis said despite extremely difficulties experienced in accessing funding, Minergy, had successfully managed to raise funding of P90 million from the Botswana Corporation (BDC) and from the Minerals Development Corporation of Botswana (MDCB).
“Initial funding includes bridging finance provided by both parties amounting to P70 million for a period of six months.  This will be refinanced through long-term agreements with both parties.  All necessary regulatory approvals are in place and agreements have been signed,” he said.

Minergy is 100 percent owned by the Masama project, operates open cast mining and it is near rail, road and water infrastructure.  It is at the advance stage of listing on the London-based Alternative Investment Market (AIM). The mine employs 250 people with 92 percent being local citizens while one-third is from the local Kweneng district. 

As part of its corporate and investment programme, Minergy has facilitated for electricity connectivity to the village, clinic, kgotla and local school. The company is the first to hold a mining licence for an open pit coal mine in Botswana where diamond mining has dominated the economy.  The mine has a life of 100 years and is expected when fully operational, to produce 2.4 million tonnes a year.



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