Eskom turns to Botswana for coal

Gaborone- Majority-citizen owned coal development firm Shumba Coal this week, revealed that the South African power utility Eskom was eager to import coal from Botswana.
Shumba’s managing director Mashale Phumaphi disclosed the plans to export coal to South Africa during the resource sector conference recently held in Gaborone. In its tenth year, the conference is the largest annual investment gathering held in the country.  It aims to increase investment into the country’s resource sector by bringing together both local and international companies looking for investment opportunities.   Eskom has fought to secure quality coal supplies for short, medium and long-term generation, partly because South African producers favour lucrative export markets. Reports also indicate that, in addition, other coal produced in South Africa is beneficiated on a massive scale to produce oils, meaning the supplies Eskom does receive are usually at rising costs. Over 80 percent of Eskom's generation is fuelled by coal. Phumaphi said Eskom needs 60-million tonnes a year of new coal to come on stream and in the next few years, it will need 120-million tones before 2020.
“Current resources holders have plans to produce over 115 million tonnes of coal per annum for export and this number could increase substantially,” he said, adding that Mmamabula and Morupule areas had the potential to establish nine mines each.  Interests by Eskom to do business with Shumba Coal come at a time when Morupule Coal Mine, a subsidiary of Debswana also in negotiation with the South African utility, according to Managing Director Jim Gowans. Gowans said Eskom is looking for coal to meet its shortfall created by the rehabilitations of its coalmines adding that a supply deal is expected before the end of the year.  
Botswana looks to exploit its 40 million tons of proven recoverable coal reserves to maintain the generally impressive economic growth, which was driven the diamond sector since independence.

June 2013
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