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Coal prospects brighten as demand surges in China

One of Botswana’s abundant resources, coal is increasingly demanded by the global market despite the world shift to green energy.

The  largest consumer of coal, China which is the world ‘s second  biggest economy after United States of America is anticipated to up their  coal demand this year. China also produces coal but is unable to meet its demand. China as the largest coal consumer, accounts for 49 percent of the world's total coal. The next largest consumer, the United States, consumes 11% of the world's total.

China's coal consumption increased by more than 2.3 billion tons over the past 10 years, accounting for 83 percent of the global increase in coal consumption .China’s micro-economy has been growing steadily in 2017, in a rising momentum, and coal consumptions in main industries like power, heating supply, steel & iron and chemicals (excluding building materials) have kept rising.

De-capacity in coal industry continued moving forward, outstripping the targeted tasks set in 2017 setting high prospects for increased demand on this year. Botswana is well positioned to benefit from the increasing demand of coal while it still lasts. Latest prospects revealed that Botswana sits on over 200 billion tonnes of coal that has not been explored. However this past year companies have been making progress in prospecting and exploring coal deposits for commercial and industrial use. Some subsequently listed on the Botswana Stock Exchange to raise capital an give Batswana a chance to own a stake in this multi billion pula industry with the recent one being Tlou Energy.

In its recent report released late last year, the World Bank Group forecasted a 4 percent increase in energy commodity prices including coal “Prices for energy commodities which include oil, natural gas, and coal — are forecast to climb 4 percent in 2018 after a 28 percent leap in 2017” reads the World Bank  Commodity Markets Outlook.

The metals index is expected to stabilize this year, after a 22 percent jump last year (2017) as a correction in iron ore prices is offset by increased prices in other base metals. Prices for agricultural commodities, including food commodities and raw materials, are anticipated to recede modestly in 2017 and edge up next year.

“Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts,” said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook. “Developments in China will play an important role in the price trajectory for metals,” he added

Apart from exporting coal to South African and overseas market Botswana companies explore coal to feed Independent Power Producers who are expected to take full swing this year as the country seeks to be power secure and even produce more for export into neighboring countries.

Another coal consumer prospected to take shape in 2018 is the multibillion pula Coal to liquid facility. Government through Botswana Oil Limited has already received 11 bidders who expressed interest for partnership in the project.   Companies exploring coal in Botswana are mainly Australian such as Minergy, Shumba and Africa Energy amongst others of which all are listed on the Botswana Stock Exchange. Most of the companies are at Environmental Impact assessments in the processes of acquiring mining licenses with production geared first quarter 2018 and thousands of jobs in the pipeline.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020
Diamonds

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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