Following up on Part 1, in which we looked at the big picture of energy supply and use in Botswana, we turn our attention in this post to coal mining and usage and examine some recent developments.
In Part 1 of this series, we noted that coal provided 41% of Botswana’s energy supply in 2015. According to data from the International Energy Agency (IEA), coal usage has grown by an annual compounded rate of 4.7% per year since 2000. Botswana has significant coal resources and it is clear that coal will continue to be an important resource well into the future.
Botswana’s coal resources can be utilized in several ways: the most obvious are the mining and burning of coal to produce electricity and coal exports. Most of the operating, planned, and proposed coal operations are associated with coal-fired electricity production and exports. However, the production of liquid fuels from coal, known as coal-to-liquid technology, and coal-bed methane, in which the natural gas associated with coal deposits is released by drilling into the coal seams, are also options under consideration.
The only operating colliery in Botswana is the Morupule Coal Mine, located near Palapye. This operation mines and prepares coal for the nearby Morupule power station. As noted previously, and highlighted in the following post, the amount of electricity generated in-country has increased significantly over the past few years due to the increased operability of the Morupule B power station. This has led to the increased mining of coal, as shown in the chart below. The refurbishment of the Morupule A power station and further expansions of the Morupule B power generation operations, discussed in Part 3, indicate that expansion of coal mining at this location is likely to occur in the future.
Source: StatsBotswana
The Morupule Coal Mine was previously owned by Debswana, the joint venture between DeBeers and the Botswana Government, but in 2016 a deal was struck for DeBeers (a subsidiary of Anglo American) to sell its 50% ownership of the colliery to the Botswana Government-owned Minerals Development Company. This is part of Anglo American’s drive to slim down its commodities profile. Anglo American had also been developing coal mining assets at the Mmamabula coal fields and had carried out feasibility and impact studies, but this work has been halted.
Several years ago, there was a flurry of project proposals to start up new coal mines for exports and to build new power plants on-site or close to these collieries to feed electricity into the Southern African Power Pool or the Botswana grid. As a result, the list of coal projects proposed for Botswana is long (see the Coal Projects in Botswana tab on this blog.) Most of these projects are at varying stages of preliminary assessment—some are still under review, some have completed detailed feasibility studies, and some are just proposals—but most are currently on hold because of the large capital investments required and low coal prices (see chart below).
Source: InfoMine
Nevertheless, some coal projects have gained traction. Shumba Energy has proposed to build two coal-fired power plants, 600 MW at Mabesekwa and 300 MW at Sechaba, supplied by locally mined coal. These are aimed at both local electricity supply and the export market. Prefeasibility studies at Sechaba have been completed. The 450 MW Sese project is a coal mine and power plant that is being developed by African Energy and First Quantum Minerals. The output for this project targets electricity exports to the Zambian mining industry.
Exporting coal is another way for Botswana to utilize its natural resources. Data from the IEA indicated that, in 2015, 10% of Botswana’s mined coal was exported. Detailed information on these exports are difficult to come by, but we suspect that these were to local markets in Namibia, Zambia, and Zimbabwe. However, export of coal from Botswana to international markets is difficult due to the lack of direct rail links to the port of Walvis Bay in Namibia or to Mozambique via Zimbabwe, and there is limited rail traffic to Richards Bay in South Africa. Moreover, exporters have to compete against large established coal mines in South Africa that have better access to transportation and export networks. There have been several proposals to build rail links to Namibia or Mozambique, but, owing to the associated cost and the current low prices for coal, there has been little progress of these beyond the discussion stage.
There are other ways to use local coal resources, such as the production of liquid fuels from coal, known as coal-to-liquid (CTL) technology, similar to that carried out at Sasol in South Africa, and coal-bed methane (CBM), in which the natural gas associated with coal deposits is released by drilling into the coal seams. There has been some progress in the CTL area. Botswana Oil Ltd., the recently formed government-owned oil company responsible for secure fuel supply and promoting involvement in the oil industry, has hired a consultant and issued a request for expressions of interest, which were to be submitted by August 2, 2017, to design, build, own, and operate a CTL facility in Botswana. It should be noted that implementation of CTL is a large and very expensive endeavor. It is a technically complicated, capital-intensive, highly polluting process with high operating costs that require high oil prices to be profitable. There are a limited number of these operations in the world: the largest is the Sasol complex in Secunda, South Africa; there are also some in China and several smaller operations scattered around the world.
Exploitation of coal-bed methane (CBM) appears to hold more promise because the technology is not as capital- and engineering-intensive. The Botswana Ministry of Mineral Resources, Green Technology and Energy Security has issued a request for proposals for the development of electricity generation plants with 100 MW capacity fueled by CBM. Two companies were recently short-listed to develop CBM projects and to each build a 50 MW natural gas-fired power station: Tlou Ltd., out of Brisbane, Australia, and Sekaname, Pvt. Ltd., a subsidiary of Kalahari Energy. The former has been granted a mining license to proceed on development.
In Part 3 of this series, we turn our attention to electricity supply and generation in Botswana. In the meantime, remember to turn off the lights when you leave the room.
Mike Mooiman and Karen Giffard
No comments:
Post a Comment
Please feel free to comment but note that I have added a verification step to avoid the large amount of spam that can make its way into the comment area. An annoying but necessary step these days.