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Shumba eyes local supplies to IPPs in 2016


Local coal miner, Shumba Coal, has endured a tough year of operations as the junior mining sector saw falling stocks with cost reductions, contraction, and suspension of operations by most miners, in a bid to survive.

However, Shumba board chair Allen Clegg, is still upbeat, future prospects, saying that: “Shumba is continuing to focus on low cost coal production for local supply to the spot market and its IPP projects in the short term,” adding that Shumba will then “export onto world spot markets into the sweet spot of the upturn medium term, giving significantly higher than normal returns, and the future is certainly bright.”

Already, Shumba is projecting sales to local power producers of coal supply of up to 1.5 Mtpa of quality thermal coal to existing nearby power producers by 2016.

“Management continues to execute it plans with a low cost overhead structure in the Company and focus on expenditure and investment for project value growth with a well-considered and controlled outsourcing model for critical expertise towards early project execution for Sechaba with consideration for a 300MWe IPP potentially supplying NamPower in Namibia,” stated Clegg in a statement that accompanied the financial results of the company for the year ended 30 June 2015.

The expansion of the Mine to produce and supply an additional 1.5 Mtpa (Total of 3 Mtpa saleable) and construction and commissioning of our Sechaba Energy 300MWe IPP, utilising this expansion in production for generation and distribution to regional grids, with NamPower targeted for end of 2017.

“Analysts continue to predict that established energy markets and producers will continue to struggle in the short term, but also indicate the attractiveness at current levels of emerging energy markets like Africa where Shumba is in prime position. The power deficits embedded in the Southern African sector and SADEC region plays to Shumba’s growing strength in its asset base as our projects advance to energy supplier and we see this continuing to underwrite our future,” stated Clegg.

Shumba, as well as other miners are currently feeling the effects of low commodity prices. The downward spiral of the sector is said to be abating according to most observers.

“The potential rebound in the market and in particular for those companies like Shumba that have shown the resilience, prudence and diligence to continue to advance despite the past difficult environment remains a high probability and possibility,” said Clegg.

With the whole sector pondering on the timing of the recovery, however, an analysis carried out by the Board led them to posit “that it is not too far away based on macro trends in currency adjustments and devaluations, the need to bring interest rates to sensible levels and inflationary pressures that will result.”

On the markets for thermal coal, Shumba believes the markets will correct by 2017/18 based on the known energy demand across South-East Asia – not including major buyers, India and china-  which is estimated to require an additional 40Mt of coal supply per annum with “the market is still heading for a significant deficit within 3 to 5 years which will force prices upward to potentially unseen levels and highs.”

Looking at the region, the Southern African power pool has a major net deficit of over 30GWe that is growing as older power plants (some 40GWe) are closed down and need replacement hence the planned Shumba Sechaba and Mabesekwa IPP’s will enter a readymade high demand market for security of return on investment for the long term.

2015 HIGHLIGHTS
In total the Group raised USD $5.95 million during the year from two separate private placements with institutional and private investors in Botswana (USD $3.19m) and Mauritius (USD $2.76m) representing a 92 percent increase in the previous year “in more difficult times.”

Total Group expenditures on Exploration and Evaluation during the year were USD $ 1,001,754.

The Group’s net assets at the end of the year were USD $8,836,183.

Cash and Cash Equivalents of the Group as at the reporting date were USD $3,415,208.

Completion of the full project PFS for Sechaba Mine & Beneficiation project with export products.


Acquisition in September 2014 of the Lethlakeng deposit prospecting licence No. PL308/2014 with estimated coal resources of 500Mt and expenditures of USD $330,000 for the next three years to investigate the strong potential for development of a UCG (Underground Coal Gasification) project.


 Acquisition in February 2015 of the 800Mt Mabesekwa Opencast Coal Mine Project and prospecting licence No. PL428/2009 in a binding agreement from Daheng Group for USD $4 million in shares and deferred cash/shares payments.


Execution of a legally binding JDA (Joint Development Agreement) with Mulilo Renewable Project Developments Pty Ltd of Capetown, for the joint development of the 600Mw Mabesekwa Independent Power Plant (MEIPP).


Completion of a strongly positive Mining Prefeasibility Study (PFS) for Mabesekwa strongly underwriting the MEIPP plan of the Company under the JDA with Mulilo.


The confirmation of the renewal of the Sechaba Licence in April 2015 by the Botswana Government underlining the confidence in the delivery capability of Shumba.


The confirmation in April 2015 of the full transfer of rights to Mabesekwa into the name of Shumba as a further show of confidence from the Botswana Government in the delivery capability of Shumba.


Management’s commitment and demonstrated competence in the disciplined maintenance of a low cost structure within the Group shown clearly in the Company’s continued advancement detailed above.


The Group remains adequately funded to meet its planned expenditure requirements in the coming financial year.

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Payless to partake in BSE’s Flagship Tshipidi program

28th June 2022
PAYLESS

Newly established wholly indigenous citizen owned retail chain Payless Retail (PTY) Ltd is set to partake in the first session of Botswana Stock Exchange (BSE)’s Tshipidi Mentorship Program (TMP) on Monday June 29th.

The TMP aims to train and capacitate SMEs so they can operate as corporates and eventually list on the local bourse. According to local bourse, BSE, the program aims to provide practical training to potential issuers through a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

Payless Retail is a newly established supermarket chain whose mission is to become a convenient one-stop shopping destination as it is one of the Botswana oldest retailing brands.  It started off as Corner Supermarket in January 1976, and to date boasts of nine stores in, among others, Gaborone, Mochudi, Molepolole and Tlokweng. Payless was recently acquired by Ellis Retail Group, which is led by businessman Elliot Moshoke.

The takeover catapulted Ellis Retail to the envious position of being the first wholly indigenous owned major retail chain. “We jumped at this opportunity because it gave us a chance to prove to Batswana that the retail business is open and lucrative.”

The objective is to create a proudly Botswana retail chain that fully supports our national Vision, economic development and citizen economic empowerment ambitions,” Moshoke told BusinessPost.

He further emphasized that Batswana are capable and able to run large scale businesses hence they need to accept invite foreign investors who will come in to support us not take the business.
“Our win as Payless in the Fast Moving Consumer goods (FMCG) industry is a win for Batswana. We need their support in this difficult and challenging journey.

As you are aware, Payless is the only retail chain in the hands of Batswana ba Sekei. We need to take advantage of this to generate employment and create small businesses in retail and Agri businesses,” he explained.

The retailer has also partnered with Botswana Investment & Trade Center (BITC) on their #PushaBW campaign with a view to initiating earnest engagement with local producers to iron out bottlenecks and ensure seamless trading.

“Local producers have to be part of the phenomenal growth of the Payless brand. This will in turn facilitate employment creation and economic growth. We did this because we have the utmost respect for local manufacturers and producers,” he mentioned.

Payless is currently restocking all of its stores; a development that Moshoke says is testament to the retailer’s commitment to growing the brand and ensuring continuity of business. He further revealed that renowned retail suppliers like PST and CA Sales have reignited their trust in Payless, opening their doors for Payless as they have faith in the retailer’s new owners.

The takeover has reportedly saved more than 200 jobs and gave a new lease of life to the previously fledging Payless brand. According to a press release from the management team, the Payless work forces are also extremely excited about what the future holds. The TMP is a comprehensive and interactive program that covers the key themes necessary to position a company to list on the BSE.

The program is administered by experts within the listing ecosystem and seeks to bring the potential issuers closer to the listings advisers, investors and leaders of already listed companies.  “As a strategic initiative, the BSE decided to set up this mentorship program in a bid to assist SMEs to strategize, corporatize and acclimatize in order to list to access equity finance and expand operations,” said the BSE.

The TMP will avail to SMEs practical insights, knowledge and feedback from institutional investors, increased awareness of the BSE listing requirements as well as an intimate network of advisors and CEOs of listed companies. After training, Payless will graduate with improve governance structures and better knowledge of articulating its business strategy. The retailer will also gain increased visibility through BSE marketing platforms.

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BITC assisted companies rake in P2.96 billion in export earnings

21st June 2022
BITC-CEO-Keletsositse-Olebile

Despite Covid-19 interrupting trade worldwide, exporting companies in Botswana which benefited from the Botswana Investment and Trade Centre (BITC) services realised P2.96 billion in export earnings during the period from April 2020 to March 2021.

In the preceding financial year, the sale of locally manufactured products in foreign markets had registered export revenue of P2, 427 billion against a target of P3, 211 billion BITC, which celebrates 10 years since establishment, continues to carry out several initiatives targeted towards expanding the Botswana export base in line with Botswana’s desire to be an export led economy, underpinned by a robust export promotion programme in line with the National Export Strategy.

The main products exported were swamp cruiser boats, pvc tanks and pvc pipes, ignition wiring sets, semi-precious stones, veterinary medicines, hair braids, coal, textiles (towels and t-shirts) and automobile batteries. These goods were destined mainly for South Africa, Zimbabwe, Austria, Germany, and Namibia.

With Covid-19 still a problem, BITC continues to roll out targeted virtual trade promotion missions across the SADC region with a view to seeking long-lasting market opportunities for locally manufactured products.

Recently, the Centre facilitated participation for Botswana companies at the Eastern Cape Development Council (ECDC) Virtual Export Symposium, the Botswana-Zimbabwe Virtual Trade Mission, the Botswana-Zambia Virtual Trade Mission, Botswana-South Africa Virtual Buyer/Seller Mission as well as the Botswana-Namibia Virtual Trade Mission.

BITC has introduced an e-Exporting programme aimed at assisting Botswana exporters to conduct business on several recommended e-commerce platforms. Due to the advent of COVID-19, BITC is currently promoting e-trade among companies through the establishment of e-commerce platforms and is assisting local companies to embrace digitisation by adopting e-commerce platforms to reach export markets as well as assisting local e-commerce platform developers to scale up their online marketplaces.

During the 2019/2020 financial year, BITC embarked on several initiatives targeted at growing exports in the country; facilitation of participation of local companies in international trade platforms in order to enhance export sales of local products and services into external markets.

BITC also helped in capacity development of local companies to compete in global markets and the nurturing of export awareness and culture among local manufacturers in order to enhance their skills and knowledge of export processes; and in development and implementation of trade facilitation tools that look to improve the overall ease of doing business in Botswana.

As part of building export capacity in 2019/20, six (6) companies were selected to initiate a process to be Organic and Fair Trade Certified. These companies are; Blue Pride (Pty) Ltd, Motlopi Beverages, Moringa Technology Industries (Pty) Ltd, Sleek Foods, Maungo Craft and Divine Morula.

In 2019 seven companies which were enrolled in the Botswana Exporter Development Programme were capacitated with attaining BOBS ISO 9001: 2015 certification. Three (3) companies successfully attained BOBS ISO 9001:2015 certification. These were Lithoflex (Pty) Ltd, General Packaging Industries and Power Engineering.

BITC’s annual flagship exhibition, Global Expo Botswana (GEB) to create opportunities for trade and strategic synergies between local and international companies. The Global Expo Botswana) is a premier business to business exposition that attracts FDI, expansion of domestic investment, promotion of exports of locally produced goods and services and promotion of trade between Botswana and other countries.

Another tool used for export development by BITC is the Botswana Trade Portal, which has experienced some growth in terms of user acceptance and utilisation globally. The portal provides among others a catalogue of information on international, regional and bilateral trade agreements to which Botswana is a party, including the applicable Rules, Regulations and Requirements and the Opportunities for Botswana Businesses on a product by product basis.

The portal also provides information on; measures, legal documents, and forms and procedures needed by Botswana companies that intend on doing business abroad. BITC continues to assist both potential and existing local manufacturing and service entities to realise their export ambitions. This assistance is pursued through the ambit of the Botswana Exporter Development Programme (BEDP) and the Trade Promotion Programme.

BEDP was revised in 2020 in partnership with the United Nations Development Programme (UNDP) with a vision to developing a diversified export-based economy. The programme focuses mostly on capacitating companies to reach export readiness status.

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Inflation up 2.3 percent in May

21st June 2022
Inflation

Prices for goods and services in this country continue to increase, with the latest figures from Statistics Botswana showing that in May 2022, inflation rate rose to 11.9 percent from 9.6 percent recorded in April 2022.

According to Statistics Botswana update released this week, the largest upward contributions to the annual inflation rate in May 2022 came from increase in the cost of transport (7.2 percent), housing, water, electricity, gas & other Fuels (1.4 percent), food & non-alcoholic beverages (1.1 percent) and miscellaneous goods & services (0.8 percent).

With regard to regional inflation rates between April and May 2022, the Rural Villages inflation rate went up by 2.5 percentage points, from 9.6 percent in April to 12.1 percent in May 2022, according to the government owned statistics entity.

In the monthly update the entity stated that the Urban Villages inflation rate stood at 11.8 percent in May 2022, a rise of 2.4 percentage points from the April rate of 9.4 percent, whereas the Cities & Towns inflation rate recorded an increase of 1.9 percentage points, from 9.9 percent in April to 11.8 percent in May.

Commenting on the national Consumer Price Index, the entity stated that it went up by 2.6 percent, from 120.1 in April to 123.2 in May 2022. Statisticians from the entity noted that the transport group index registered an increase of 7.3 percent, from 134.5 in April to 144.2 in May, mainly due to the rise in retail pump prices for petrol and diesel by P1.54 and P2.74 per litre respectively, which effected on the 13th of May 2022.

The food & non-alcoholic beverages group index rose by 2.6 percent, from 118.6 in April 2022 to 121.6 in May 2022 and this came as a result of increase in prices of oils & fats, vegetables, bread & cereal, mineral waters, soft drinks, fruits & vegetables juices, fish (Fresh, Chilled & Frozen) and meat (Fresh, Chilled & Frozen), according to the Statisticians.

The Statisticians said the furnishing, household equipment & routine maintenance group index rose by 1.0 percent, from 111.6 in April 2022 to 112.7 in May 2022 and this was attributed to a general increase in prices of household appliances, glassware, tableware & household utensils and goods & services for household maintenance.

The prices for clothing & footwear group index moved from 109.4 to 110.4, registering a rise of 0.9 percent during the period under review. Bank of Botswana has projected higher inflation in the short term, associated with the likelihood of further increases in domestic fuel prices in response to persistent high international oil prices and added that the possible increase in public service salaries could add also upward pressure to inflation in this country.

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