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Minergy experiences exceptional turnaround in fourth quarter FY22

Loss-making trend replaced with profitability and positive cash flows

Minergy, the coal mining and trading company, today released results for the year ended 30 June 2022. The Group achieved combined revenue of P425 million (2021: P193 million), with cost of sales of P484 million (2021: P256 million). Pure coal sales, which exclude transport and Free-on-Board (FOB) cost recoveries, amounted to P297 million (2021: P167 million). Notably, for the first time since inception, Minergy extracted and processed over a million tonnes of coal in a single financial year at the Masama mine.

According to Minergy CEO, Morn du Plessis, the year under review was historic. We had a challenging first three quarters followed by an exceptional turnaround in the fourth quarter, as many European and Asian countries looked for alternative sources of supply. As a result, Minergys high-quality coal became a sought-after commodity.

Du Plessis said that the year had also been marked by several key events and trends, including the pay out of the final tranche of debt funding early in the financial year, and the conclusion of debt restructuring in support of stabilising the business.

A highlight was the successfully commissioning of Stage 4 of the processing plant the rigid screening and stock handling section in October 2021, ending construction on the plant. The fully functional plant contributed significantly to a steady production environment, albeit restricted to available sales demand which did not support full capacity for the first nine months.

In terms of market trends, du Plessis said that demand had been constrained for most of FY22 as the result of an oversupply of coal into the regional market because Transnet Freight Rail (TFR) failed to support coal dispatches into the export market via Richards Bay, a fact that has been widely publicised. This situation was exacerbated by diminishing offtake from contracted key customers plant maintenance and breakdowns. Given this, mining and coal processing output rates were reduced to avoid coal losses through spontaneous combustion and limit cash-absorbing inventories. Outputs were further challenged by operational interruptions from freak rainfall in April 2022 and intermittent power outages.

Then it all changed. Globally, the war in Ukraine created high coal prices at the end of the third quarter of FY22, as the energy markets came under severe security of supply pressure. This led to extraordinary demand facilitating access to previously uncompetitive and uneconomical exports into the seaborne market during the fourth quarter. Reciprocally, with plant and mining capacity available, production was ramped up to meet this new burgeoning demand.

Du Plessis said that hyperinflationary-like price increases of explosives and administered prices, such as diesel, had unfortunately reduced the positive effects of increased revenue. Diesel and explosives increased by 127% and 57%, respectively, which was exacerbated by double-digit inflation in Botswana.

It must be noted, however, that the recovery recorded in the fourth quarter is setting the tone for profitability for FY23.


Operating costs continued to show a decreasing trend and amounted to P19 million (2021: P23 million).

An operating loss of P74 million (2021: P85 million) was recorded, primarily due to the Group achieving breakeven in the last quarter, including individual month profitability, cementing a good foundation for the future. The cash or EBITDA loss was P58 million (2021: P74 million), representing an improvement of 22% from 2021 and a 39% improvement from 2020.

Net cash used in operating activities increased to P110 million (2021: P37 million) on the back of increased working capital investment, which contributed a swing of P91 million for growth in the fourth quarter.

Finance costs remain a challenge as a result of the skewed capital structure totalling P93 million (2021: P51 million), bringing the net loss after taxation to P132 million (2021: P107 million).


Pure coal revenue (ex-transport) increased by 77%, driven by a 40% volume increase, with average sales prices increasing by 26%.

A monthly sales volume record in excess of 75 000 tonnes was achieved in May 2022 on the back of destocking and FOB export sales.

Better product mixes supported sales into the seaborne thermal coal export markets, and Minergy successfully delivered two FOB vessels from Walvis Bay as well as exported coal via Zimbabwe to Maputo by rail.

Mining overburden moved and coal extracted increased by 82% and 54%, respectively. Processed volumes increased with increased mining volumes also supporting feed in excess of a million tonnes in a single year. Pleasingly, water utilisation is improving, and weve achieved a 33% savings in litre per tonne consumption, justifying the investment in the dewatering screen, filter press and rigid screening section, said du Plessis.

He added that mine rehabilitation is an ongoing process, with 4 million m3 rehabilitated in FY22. This is exceeded the total volume rehabilitated since the start of mining operations.


Minergy continues to uphold an outstanding safety record, having had only one minor lost time injury during FY22. We are grateful to be fatality free on the back of strictly managed health and safety systems. COVID-19 remained a threat during the full year, with a total of 138 cases reported since the start of the pandemic. Thankfully, all staff have fully recovered. High vaccination rates limit business interruptions.

Minergy is committed to providing its workers with a safe work environment. As of the end of FY22, 97% of employees – 96% of which are Batswana had been vaccinated.

Corporate social responsibility remains core to the Group for communities in and around the mining area, as does supporting the Botswana economy. P488 million was spent on local registered company procurement this year, with P9 million paid in royalties and P5 million in local taxes. Minergy also has an active Citizen Economic Empowerment Plan in place, which yielded the utilisation of 22 local transporters. We continue to have a strong ethical base in place, which include a Whistleblowing Hotline.


Looking towards the future, du Plessis said that Minergy is operating at production capacity of 125 000 tonnes of Run-of-Mine (ROM) with stable plant performance and export opportunities favouring a better product mix and pricing.

Our strategy remains to operate at production capacity and maximise sales. Historically, plant and market factors limited us from operating at optimal capacities, but fortunes have now changed. This turnaround supports the expansion of mining operations to produce additional coal, and the mining fleet has been increased to capitalise on this. Opportunities to exceed production capacity and the resultant additional saleable production are being pursued.

As coal export prices remain high on the back of the Ukraine war, Minergy continues to capitalise on viable export opportunities through Walvis Bay and Maputo through the establishment of new sales agreements with coal traders.

Overall, the outlook for the coming year is positive and is forecast to be operationally profitable, as demonstrated in quarter four, which would be the first year for such an achievement after challenging start-up years.

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New Khoemacau owners commit to mine’s multibillion Pula expansion

6th December 2023

The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.

Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.

To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.

The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.

The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.

Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.

The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.

The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.

In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.


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Khoemacau Copper Mining to be acquired by MMG Limited

6th December 2023

Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.

MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.

MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.

Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.

With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.

The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.

MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.

The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.

In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.



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BPC Signs PPA with Sekaname Energy

6th December 2023

The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.

The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.

Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.

The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.

Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.

Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.

In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.

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