Maatla Energy acquires P1.6 billion Mmamabula Energy & Coal mining
Diversified energy and coal exploration outfit Maatla Energy has closed in a deal to acquire majority shareholding in Jindal BVI Ltd from Jindal Steel & Power Limited, a Mauritius conceived global energy conglomerate owned by Indian Billionaire Industrialist Naveen Jindal, Weekendpost has established.
Maatla Energy is a multibillion pula mid-tier coal mining company in Botswana wholly owned by Maatla Resources Limited. The company is currently developing a coal export mine in Mmamabula Coal Fields, 145 kilometers north of Gaborone. The Mmamabula Coal Project contains over 90Mt of high-grade thermal coal. Maatla Energy is also currently conducting feasibility study to explore setting up Coal- Liquefaction Plant in around the operation.
On the other hand Jindal BVI is an investment company incorporated in accordance with the Laws of the British Virgin Islands. It is controlled by Jindal Steel & Power Limited; an investment company registered in Mauritius.Jindal BVI is involved in the mining and metallurgy industry with subsidiaries in Barbados, Bahamas, Mauritius and Botswana. In Botswana, Jindal BVI is present through Jindal Resources (Pty) Ltd a coal exploration and mining company, Trans Africa Rail (Pty) Ltd a railway construction company and Jindal Energy Botswana (Pty) Ltd a power and energy Management outfit.
Jindal BVI ‘s other subsidiaries in Botswana are Meepong Group of Companies encompassing Meepong Resources (Pty) Ltd a mining and management company , Meepong Energy (Pty) Ltd power station operation company in Mmamabula, as well as ,Meepong Services (Pty) Ltd and Meepong Water (Pty) Ltd focusing on infrastructural and water abstraction respectively. All these subsidiaries under Jindal BVI were set up as operation companies for the Mmamabula Coal projects.
Reports from global media outfits indicate that Maatla Energy has put a price offer of $150 million for the acquisition of 97.44% of issued share capital in Jindal BVI a holding company housing all the above subsidiaries. In March this year Competition Authority Botswana as a regulatory requirement floated a merger notice in the market calling for expression of any opposition against the proposed acquisition.
Reports confirming Jindal Steel & Power Limited (JSPL) divestment from Jindal BVI suggests the transaction is predominately motivated by JSPL‘s quest to pare debt at group level.JSPL is reported to have a total outstanding debt of Rs 40,000 crore(over $5.6 billon) as on March 2019.
Company Executives have confirmed that JSPL has entered into a share purchase agreement to divest its stake in the Botswana project for a consideration of around $150 million as part of its international portfolio rationalization, an undertaking focusing at disposing some of JSPL mines and minerals assets across Australia, Asia and Africa.
“The assets are being rationalized and monetized keeping in view their long-term viability, the raw material security for JSPL and the profitability of each of these businesses. The Group has been combing each asset, with a view of either exiting it or building it, to add to the bottom-line,” disclosed JSPL on various market platforms.
Jindal Africa, a subsidiary of JSPL, bought the coal explorations which are also around Mmamabula from CIC Energy for $116 million in 2012, as part of its global expansion. The project plan also included setting up a 1,200-Mw power plant in the area. The company has investment and business ventures in other Southern African markets such as Mozambique, Namibia, Zambia, Tanzania and Madagascar. However, with rising debt and global slowdown in the coal and steel market over the past few years, JSPL is selling off its international ventures to reduce its debt burden.
Maatla Energy exploration parameter, Mmamabula is one of the main coalfields in Botswana and contains more than 90 million tonnes of high grade thermal coal. Maatla’s Mmabula flagship mine has a life in excess of 25 years and is targeting initial production of 50 000 t/m, ramping up to 100 000 t/m within the first year of production. Currently site establishment and construction activities are underway with first coal sales expected in 2019.
There is an upward movement in the international coal price and an increasing demand for the high grade sized coal in the Southern Africa inland market. The Mmamabula coal mine will produce high grade coal for cement and lime producers, paper mills, chemical industries, brick works, breweries, sugar estates, hospitals and for general boiler applications in Southern Africa.
Maatla Resources says its mission is to develop the coalfields of Mmamabula to generate and supply coal which will power Botswana’s economy and assist in achieving energy security in the long term. With this acquisition Maatla Energy now stands to be a major player in the Mmamabula Coal exploration rush and Botswana’s coal industry as a whole.
Botswana’s Coal Industry
Botswana has over 200 billion tonnes of coal deposits underground, though the world is moving to green technology experts say the lucrative deposits cannot go unnoticed and be left untapped. Briton Billionaire Global Entrepreneur Sir Richard Branson also shared the same sentiments when headlining the 2017 Global Expo. He urged Botswana to explore coal deposits for industrialization, economic diversification and most importantly creation of much needed jobs as well as GDP growth in the interim while the country seeks environmental friendly energy generation alternatives.
Amongst international companies who are exploring the coal business and its value chain in Botswana are Tlou Energy, Shumba Energy, and Minergy all which are listed on Botswana Stock Exchange. Currently the only operating coal mine is Morupule Colliery founded by mining giant Debswana Diamond Company. Morupule is now wholly owned by government through Mineral Development Corporation (MDC).
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.