Morupule A is producing 45 megawatts, as the 30-year-old power station returns to operation on a trial basis after six years of refurbishment, BusinessWeek has learnt.
Morupule A, with a nameplate capacity of 132MW, was for decades the country’s sole power station, until it was mothballed in 2012 after an adverse cost-benefit analysis. At that time, the power station’s plant availability had dropped to below 30%, from 84% in 2008. The refurbishment, costing approximately P2 billion, has been finalised and testing of each of the four units is currently underway, Botswana Power Corporation (BPC) chief executive officer, Stefan Schwarzfischer said.
“Right now we are getting 45MW from the plant but this goes up and down because it is on a trial test and we ramp the systems up and down, meaning there’s no constant flow,” the CEO said. “Two units will be up and running on a commercial basis by the end of this month and the other two should follow two weeks after.
“We are making great progress.” Morupule A was the subject of protracted tendering disputes, which on several occasions resulted in the then Energy Minister addressing Parliament to clear the air. Schwarzfischer said while the project had been delayed, the emphasis had been on avoiding the errors made with quality on Morupule B, the adjacent bigger power plant dogged by faults since 2012.
“We didn’t want to do the same mistake done with Morupule B, where there were too many quality issues. “There’s no compromise to quality. Quality and safety come
first and we wanted to make sure this plant is running up to scratch,” he said. The return of Morupule A is timely, as BPC starts the P1.2 billion major remediation works on the 600MW Morupule B power station.
Under the works, each of Morupule B’s four units will be taken down for a year for remediation, a situation that requires all other available generation in the country to be in good nick. “From January 1, 2019, we will be taking one unit out of service at Morupule B, revamping it completely for 12 months with a trial of three months after, then taking out the next,” said Schwarzfischer.
“We need to have risk mechanisms in place to cater for the loss of that one unit. Ideally, we would like to produce our power with Morupule B with Morupule A compensating for the loss of that unit. If anything fails, we should have our diesel generators and in the event of everything failing, we should have access to imports.
“While we remediate Morupule B, we are also trying to spin a net so that whatever happens we are secure, but not exposed to too much costs.” The country’s peak electricity demand is presently 575MW met through Morupule B and A, while 160MW of emergency diesel generation from units at Orapa and Matshelagabedi is also on standby.
Johannesburg — THIS week, experts in Washington praised a little-known laboratory in Johannesburg (South Africa) that has pioneered ways of burning coal with less emission.
Professor Rosemary Falcon heads the Clean Coal Research Group at the University of the Witwatersrand. There, she leads a team of chemists, engineers and other scientists along with 20 masters and doctoral students who say they have proved conclusively that clean coal is not only possible, but among the cheapest ways to generate electricity on a continent where more than 600 million Africans live without power.
“It starts by understanding that each region has a different recipe of minerals,” Dr Falcon said. “If you give me a lump of coal out of Kenya, the US, Europe or China, I can probably tell you where it’s from.” “An industrial boiler from Europe, fed with South African coal, will melt because our product burns so hot. But we also have more ash that actually absorbs heat making the fire less efficient. So one of the first steps is to alter the coal before you light the fire. Or build a boiler specifically for each country.”
Her husband, Lionel, a retired engineer, lends his know-how from years in business and industry. Working with Falcon is Dr Nandi Malumbuzo who took her PhD in chemical engineering at Wits.
“In Africa, the use of coal is growing and that’s something we have to deal with,” she says. “The challenge is to burn it more cleanly and this starts at the mine with techniques we’ve developed to separate poor quality coal from the better stuff that is already less toxic. “You then crush it and remove elements that will not contribute to a good burn. Like unleaded petrol, you’re starting from a better place. Less ash, less fumes, more heat and a longer burn. “From there we’ve done experiments and written up peer-reviewed research to show we can use it way cleaner than in most countries, reducing some emissions to zero.”
In Washington, Barry Worthington, director of the United States Energy Association, said the South African research was “vital in the move to a cleaner and better use of coal.” It was tempting, he said, “to believe the answers always come from Europe or America, when others may be ahead of us in the field.” Former White House energy advisor, George David Banks, said it was “time to unite” those working on clean coal across all six continents. “We need to locate the research schools, like this one in Johannesburg, and bring them together,” he said. “The world is not going to stop using fossil fuel any time soon, but we can do it so much better.”
Mr Worthington said he would like to see Prof Falcon and her team on a speaking tour in Washington. “I think people need to hear what’s happening elsewhere,” he said. “The debate has become too political and we need a more objective view.” But, for all its ground-breaking work, South Africa’s clean-coal is in trouble. “Funding has been difficult,” said Falcon. “We have to scrape and beg for every cent. We are passionate about the work, and there’s still a lot to do, but the money is not always there.” The Wits research has also drawn praise from across the continent. Dr Samson Bada from Nigeria has joined the team along with Dr Jacob Masiala from the Democratic Republic of Congo. Both are engineers, working on ways to get the lights on in Africa and keep the air clean. The faculty has post-graduate staff and students from Zimbabwe, Botswana and Mozambique and receives queries from around the world.
“If we mix pulverized coal with bamboo, something that grows well in Africa, we take emissions down even further,” said Dr Masiala. “Of course, a bamboo plantation also gives you carbon credits, and we can grow it on old mine sites to rehabilitate the ground. It’s a winner on so many fronts.”
Falcon has given lectures at prestigious schools like Cambridge University in England, Nandi Malumbuzo has been to Germany, Australia and the Philippines. Bada and Masiala have delivered papers in the US, Norway and Italy. The use of coal to generate electricity in Africa is at a record high. South Africa gets more than 90 per cent of its power from coal, in Botswana its 100 per cent, both Kenya and Tanzania are building new coal-fired generators and Zimbabwe is retooling its plant south of Victoria Falls. Samson Bada has little time for those who condemn this.
“I am so tired of being lectured by people in rich countries who have never lived a day without electricity,” he said. “Maybe they should just go home and turn off their fridge, geyser, their laptops and lights. Then live like that for a month and tell us, who have suffered for years, not to burn coal.”
Jacob Masiala agrees. “Aid groups come to Africa and give out solar lamps the size of a pumpkin,” he said. “But no one in London or Los Angeles would be willing to make do with that as their only source of electricity”. He said the coming revolution in Africa was not about land, religion or politics, but a lack of jobs. “Don’t tell me that China, Russia and the West should have electricity and black people in Mali or Mozambique should live in huts with light from a solar toy. We need power for factories and to run schools and hospitals.
“Africa is urbanising faster than anywhere on the planet. And our urban youth are on the same Facebook and Whatsapp as kids in Chicago. They watch the same *Big Bang Theory* on TV and have the same aspirations.” Millions of school leavers, he said, could read and do algebra but had no work. And the lack of industry, he said was linked to electricity. Dr Bada said he was a fan of wind and solar, but the technology was not yet there to industrialise a continent. “Solar doesn’t work at night, and turbines stand idle when the wind doesn’t blow. “How do you run an operating theatre with that, let alone a city?”
Other countries, he said, needed a massive jump in the amount of power they generate. “Tanzania, for example, has around 70 per cent of its people still short of electricity while it sits on four billion tons of coal. And still we hear activists from wealthy countries chanting, ‘Leave it in the ground.’
“Electricity in Africa is not just an ethical issue, it is key to security and growth. And the rich world ignores that at its peril.” If there is one thing that angers everyone at the faculty, it’s those who say clean coal is a myth. Dr Falcon said they were either in denial or unaware of the truth. “Tell me there’s no such thing as unleaded petrol or fat-free yoghurt and maybe I’ll hear you out when you chant: ‘There’s no such thing as clean coal.’ “In our lab, we have clean coal, provable, peer-reviewed and with experiments that can be replicated anywhere.” The science, she said was there. “Clean coal is a reality. And now we must start using it now to make a better world.”
The International Finance Corporation (IFC) reports that its programme to support African governments and utilities in procuring solar photovoltaic (PV) capacity from independent power producers (IPPs) has made significant headway in four countries, with construction of the first project under way in Zambia.
Dubbed Scaling Solar, the programme combines best-in-class procurement practices, which have been garnered by the IFC and the broader World Bank Group over the past three decades, into a comprehensive package, which is then tailored to the specific circumstances and needs of the procuring country or entity.
IFC country manager Saleem Karimjee tells Engineering News Online that an increasing number of African governments and utilities are interested in adding grid-scale solar PV to their electricity mixes, particularly in light of the rapid decline in technology costs.
However, many of countries still lack the confidence, the capacity or the institutional frameworks to engage with IPP developers in a way that gives the country comfort that it is procuring the lowest-cost solar solution possible.
“Through Scaling Solar we are able to boost the confidence of the procuring entities by offering a tried-and-tested template for conducting competitive bidding processes and for engaging contractually with IPPs,” Karimjee explains.
The documentation is only part of the “secret sauce”, with IFC also offering procurement process management expertise and debt financing, where required. The institution’s involvement is also designed to unlock commercial, as well as other development finance to ensure the project proceeds.
In the case of solar projects, it is also possible to attract climate-related funding, as the projects are aligned with the World Bank Group’s objective of supporting generation solutions that either avoid or displace greenhouse gas emissions.
Likewise, the involvement of the IFC and the World Bank decreases uncertainty for IPPs, as it offers assurances that the projects are not only bankable, but that they will be free from government interference and that timeframes for reaching financial close will not be overly protracted.
“We believe we can reduce the timeframe for progressing a project from concept to construction from over five years to less than two years, which significantly increases the attractiveness of these projects to IPPs.”
The programme was initially piloted in Zambia, where two 50 MW projects have since been procured by Zambia’s State-owned Industrial Development Corporation using the Scaling Solar framework. The process attracted 19 high-quality bidders, Karimjee highlights.
The first $60-million project, which is being developed by a consortium comprising Neoen and First Solar has reached financial close and is in construction, while the second, being developed by Enel Green Power, is expected to close imminently.
Karimjee says the IFC, which is providing debt finance to the projects, was particularly please with the tariff achieved through the process. The developers bid tariffs of 6.02 US cents per kilowatt-hour and 7.84 US cents per kilowatt-hour respectively. The power purchase agreement period is for 25 years.
In Senegal, even lower tariffs have been secured from a consortium comprising Engie and Meridiam for two solar PV projects with a combined capacity of 60 MW. The projects, which have yet to reach financial close have been bid at tariffs ranging between 3.80 and 3.98 Euro cents per kilowatt-hour.
The Scaling Solar programme is currently also being utilised in Madagascar and Ethiopia and Karimjee reports that several other African countries have expressed interest in deploying the framework in the coming months and years.
The IFC is also considering whether future projects should not also include a battery-storage component, either to back-up the variable plants during cloud-outs or for reasons of grid-stability, or shoulder supply. “This is a growing consideration given recent declines in the cost of storage.”
n a major policy reversal, State-owned electricity producer Eskom is budgeting to invest in the sustenance of mines that supply coal to the utility on a cost-plus basis.
During Brian Molefe’s controversial tenure as Eskom CEO, the utility became hostile to the cost-plus model, which Molefe described as being akin to owning a bakery when it was bread that was required.
However, acting CEO Phakamani Hadebe, who was appointed in January as part of an intervention to arrest governance and financial decline at the utility following the election of Cyril Ramaphosa as African National Congress president, said on Thursday that buying coal “is not like buying bread at the shop”.
Speaking in Johannesburg at a briefing convened to offer a system-balance prognosis for the high-demand winter period in light of low coal stock levels of seven power stations, Hadebe confirmed that stocks had fallen, in recent months, to below the 20-day target at the power plants. The power stations affected included Arnot, Tutuka, Majuba, Hendrina, Camden, Kriel and Komati.
Stocks had, however, already been restored to desired levels at the Komati power station and, following receipt of a notice from the National Treasury providing Eskom with an exemption from normal competitive procurement practices, there was an expectation that stocks should be fully restored across the entire coal station of 15 fleet by November.
UPWARD BUDGET PRESSURE
Group executive for generation Thava Govender said that it was premature to provide an estimate for what it would cost the utility to replenish its coal stocks, but he acknowledged that it was likely to place upward pressure on the group’s 2018/19 primary energy budget. During its 2017 financial year, Eskom reported total coal costs of R58.5-billion as part of total primary-energy costs of R82.8-billion.
Govender said that, should the additional coal be secured at between R400/t and R450/t, the utility’s coal costs might remain within budget, so long as it was also able to limit its use of the diesel-fuelled open cycle gas turbines (OCGTs).
Hadebe acknowledged that Eskom has made increased use of the OCGTs in recent months, owing to reduced coal plant availability as a result of planned and unplanned outages, but dismissed reports that it had returned to spending R1-billion-a-month on diesel.
For 2017/18, Eskom spent R320-million to operate the OCGTs, down from R340-million in the prior year. However, as a result of a rise in unplanned outages since January, partly the result of coal shortages, OCGT costs spiked in March at R68.4-million.
The short-term coal replenishment plan for the six power stations that remained below target would involve a combination of shifting coal from stations that had surplus, as well as buying additional coal from various suppliers. Coal stockpiles across all Eskom’s coal-fired power stations currently stood at an average of 35 days, excluding Medupi and Kusile.
OPTIMUM THE TRIGGER
The shortage had been triggered primarily as a result of non- or under-delivery of coal to the Hendrina power station from the Optimum mine, owned by Gupta-family-linked Tegeta. However, it was also attributed to the historical underinvestment at cost-plus mines.
Tegeta controversially secured a R650-million prepayment from Eskom to enabled it to buy the mine out of business rescue. The previous owner, Glencore, placed the operation into business rescue after Eskom refused to negotiate an increase in the R150/t fixed-price contract.
The failure of Optimum – which is again in business rescue – to meet its delivery commitments had a knock-on effect on stocks at the other power six stations. Currently all coal being supplied to Hendrina is being trucked in, but Eskom is also concluding an interim coal supply agreement with the Tegeta business rescue practitioners to enable coal supply to the power station while the business rescue process is in progress.
The utility had also suspended power station and primary-energy managers at Hendrina after it discovered stockpile-reporting irregularities that had precipitated and accentuated the current shortfall. It had also since conducted an aerial reconnaissance of coal stocks at its other power stations to confirm that the irregularities were not more widespread. Govender said the survey confirmed that the other stocks were being accounted for correctly.
Despite the shortage of coal Hadebe insisted that load-shedding was unlikely during the upcoming winter period.
LONGER-TERM COAL PLAN
However, Eskom still needed to shore up its coal supply for future operations, as it currently only had 84% of its coal contracted up until 2025. In addition, at current procurement rates it was estimating a 15% yearly shortfall against its production and stockpile targets.
To close the gap, Eskom would pursue a three-pronged coal procurement strategy that had been endorsed by the National Treasury and the Department of Public Enterprises.
The strategy included giving priority to the recapitalisation of its cost-plus mines; the selection of bidders to supply it with an addition 100-million tons of coal over the coming five years; and finalising the 60-year coal-supply contract for the Kusile power station, which is being built in Mpumalanga.
Senior manager integrated planning Andre van Heerden reported that Eskom was currently evaluating responses to a tender for the supply of 100-million tons of coal, but that these contracts would not be in place before the 2019/20 financial year.
The tender for the Kusile coal-supply contract had also closed and Van Heerden reported that negotiations with potential suppliers were about to get under way.
He stressed, though, that Eskom was not aiming to secure 100% of its coal requirement to 2025 so as to ensure that it did not “over commit” at a time where there were a number of uncertainties over the long-term future of a number of the coal-fired power stations.
Coal contracting, he added, was an ongoing process, with Eskom having concluded 23 contracts for 2018, which vary in duration from six-month contracts to 12-year commitments.
VANCOUVER, May 1, 2018 /CNW/ - (LUC – TSX, LUC – BSE, LUC – Nasdaq Stockholm) Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to announce the promotion of Naseem Lahri, BCOM, FCCA to Managing Director of Boteti Mining (Pty) Ltd, Lucara's 100% owned subsidiary in Botswana, effective immediately.
Naseem Banu Lahri is an accomplished Professional Accountant with a Masters in Strategic Management (BCOM, FCCA), with more than 17 years' experience in the mining industry, including 10 years within Corporate Finance at Debswana at the senior management level. She has also served as a board member in the Debswana Pension Fund, Botswana Accountancy College and Pula Medical Aid. Naseem has served as Boteti's CFO and Director since March 2013, responsible for Finance, Administration and Security. In her expanded role as Managing Director, Boteti, Naseem will have oversight in all aspects of the business and as a matter of priority, will be working closely with General Manager Johane Mchive, appointed in 2017, to help drive improved performance at the Karowe diamond mine.
Eira Thomas commented: "I am delighted to be welcoming Naseem into her new role as Managing Director of Boteti, the first woman and the first Motswana woman to serve in this capacity for a diamond company in Botswana. Naseem combines the skills, experience and depth of knowledge to ably lead our business interests in Botswana, and I am confident that under her stewardship, the maximum, long term value of our Karowe diamond mine will be realized, to the benefit of all stakeholders."
On behalf of the Board,
Chief Executive Officer
Botswana is exporting power for the first time in 10 years, a far cry from the days when Africa’s biggest miner of diamonds was forced to import as much as 75 percent of its needs.
State-owned Botswana Power Corp. started “limited” sales to the Southern African Power Pool’s auction platform, where regional utilities buy and sell electricity, Chief Executive Officer Stefan Schwarzfischer said in an interview Thursday.
Sales have been made possible by improved plant availability at the flagship 600MW Morupule B plant, which is now producing 450 megawatts and is expected to reach full capacity next month, Schwarzfischer said. Exports will rise to a targeted 100 megawatts once the 120MW Morupule A plant is put back online in July, following a six-year refurbishment program, he said.
Botswana’s problems started in 2008 when its main provider, South Africa’s Eskom Holdings SOC Ltd., cut supplies citing a lack of power in its home market. Botswana fast-tracked the Morupule B plant in response, but it was beset with construction problems and machine failures.
“Namibia and South Africa have been the buyers thus far through the SAPP platform,” Schwarzfischer said. “While we would want bilateral supply contracts, the countries we know could pay us don’t need it and those that need the power have problems paying.”
Botswana, South Africa and Mozambique are beginning to play a much bigger role in the Southern African domestic and export coal market, says Botswana Mineral Resources, Green Technology and Energy Security Minister Sadique Kebonang.
Speaking at the IHS Markit South African Coal Export Conference, in Cape Town, on Thursday, he pointed out that new coal export rules, as well as a specific government focus on investment and infrastructure are providing new life and growth ahead of this market, particularly in Botswana.
While the country has been entrenched as one of the major diamond producing countries in the world, with major miners such as De Beers operating several mines, the government has a national strategy to diversify away from diamonds.
Notably, the export of coal has been identified as one element of the country’s coal monetisation roadmap.
“The government of Botswana’s approach to the monetisation of a coal reserve, as well as the drive towards diversifying the mining sector, with specific reference to coal, is to focus on the domestic use and export of coal, as well as the generation of electricity for domestic users,” he said.
He stated that Botswana, in terms of the market, “offers an attractive value proposition” to meet demand in Africa and, in particular, for many inland users in South Africa, as there are electricity consumer markets in North West and in the Northern Cape.
Botswana is endowed with significant coal reserves estimated at up to 200-billion tonnes.
In 2017, industry analyst BMI Research, a Fitch Group company, forecast that “the country’s coal output will increase from 2.3-million tons in 2017 to 3.8-million tons by 2021, with the sector’s share of total mining industry value growing from an estimated 2.6% in 2012 to 6.9% by 2021”, Mining Weekly reported.
Kebonang also pointed to the country as having one of the best investment climates, particularly in terms of mining, citing the country’s partnership with De Beers, which spans almost 50 years, as a key example. The security of investments, political stability and a functional judicial system are further advantages, he enthused.
According to the Africa Investment Index 2016, which was compiled by investment management and advisory services provider Quantum Global’s independent research arm, Quantum Global Research Lab, Botswana had been named “the most attractive economy in Africa, scoring highly on factors that include an improved credit rating, current account ratio, import cover and ease of doing business in the country”.
A delegate from energy industry player Shumba Energy, which has operations in Botswana, agreed, highlighting the railway initiative between logistics providers Botswana Rail and Transnet to open a line from the Waterberg to Botswana, thereby reducing the distance to Richards Bay for coal exports.
“It is a very exciting time to look at Botswana; we do have a very competitive quality,” the delegate said.
Specialist law firm Malan Scholes director Hulme Scholes also lauded the Botswana government for its administration, efficiency and understanding of the mining industry.
While Kebonang underscored the importance of the Botswana coalfields' magnitude and quality, he highlighted its significance from a regional perspective and in an increasingly high energy demand environment.
“In the export of coal and, in particular for countries that rely on integration, and regional transport infrastructure, the regional perspective cannot be overemphasised,” he stressed, noting that significant constraints to the evolvement of the coal industry include the adequacy of infrastructure to convey the coal from the mines to ports.
It was, therefore, his hope that the conference would engender a regional perspective and cooperation.
Kebonang also suggested that it was worth noting that the South African domestic market is becoming more and more undersupplied as international demand for lower-quality coals increases.
Further, in recent weeks, South African coal export prices have reached highs not seen since early 2012.
“We can only hope that this will be the start of a sustained upswing and a brighter future for the industry,” he said.
Transnet is moving ahead with projects to boost the volume of coal carried from the coalfields to the port of Richards Bay and Maputo, says GM capital planning Brian Monakali.
He told delegates attending the IHS Markit South African Coal Export Conference, in Cape Town, this week, that some of the group’s plans and projects were at an advanced stage.
This included the doubling of the Overvaal tunnel, with the aim of boosting the network capacity from 81-million tonnes to beyond 132-million tonnes.
The expansion project will develop a second line within 20 m of the 4-km-long railway line near Ermelo, in Mpumalanga.
“All the design work has been completed. The team is reviewing the entire package to ensure the solution is the most optimum one,” said Monakali.
Although the cost of the tunnel was projected to be high, Transnet was hoping to reduce the costs by working with the design team.
“It’s a challenge with current market challenges. We’d like to optimise the capital and do the project at a lower cost.”
He said a team had been to Germany and Norway to learn about their experiences.
“We’re looking at 2022 to get the project done. We have followed the normal governance processes to get to the next phase. We now need to go to the market to get a service provider to do the project.”
He said Transnet was also strengthening the Ermelo network to meet future demand, so that 200-wagon trains could run from the source.
“This would increase capacity and improve efficiency.”
Monakali said Transnet continued to carry out intensive maintenance on the current tunnel and was looking at implementing a more intelligent computer monitoring system to ensure its structure, which would accurately pick up any potential problems.
He said intensive maintenance was carried out monthly at the tunnel. The system is shut down for one day a month to do maintenance in the tunnel, with another ten days of intensive maintenance every year.
He said Transnet was also planning to further unlock the Waterberg coalfields by upgrading the line to enable it to carry more coal.
Transnet was also in a prefeasibility stage with Botswana Railways in a project to more easily transport Botswana’s growing reserves of coal to the ports of Richards Bay and Maputo.
Meanwhile, the Swaziland rail link, which involves the construction of a new 150 km link to Swaziland, had passed the feasibility phase and is ready to go to market to request funding, said Monakali.
The link would enable a dedicated general freight line and a separate coal line from Ermelo
A planned $800-million expansion of a coal-fired power plant in Botswana by Japan's Marubeni Corp and South Korea's Posco Energy has been put on hold due to a disagreement over terms, the energy minister said on Monday.
Marubeni and Posco Energy were due to start work in January last year on a project to add 300 megawatts to the current 600 megawatt Morupule B plant, which was built by the China National Electric Equipment Corp at a cost of $970-million.
The power station has often broken down, leaving Botswana to rely on diesel generators and imports from South Africa.
Energy Security Minister Sadique Kebonang told Reuters the government failed to agree with Marubeni and Posco Energy on a number of issues, notably a proposed $800-million State-backed guarantee to protect the companies' investments.
“The power purchase agreement has now expired since the project failed to take off within a year from the date of signing as stipulated in the agreement," Kebonang said.
“It’s not only the guarantee that was the problem. They wanted many other things which we could not agree to. It’s a stalemate, each party will now review its options."
Officials at Marubeni and Posco Energy did not respond to request for comment.
OHANNESBURG (miningweekly.com) – Canadian diamond junior Lucara Diamond’s Karowe mine, in Botswana, is expected to process between 2.4-million and 2.7-million tonnes of ore and produce between 270 000 ct and 290 000 ct of diamonds in 2018.
In an update to shareholders on Thursday, the diamond miner noted that the performance of the mining contractor at Karowe had improved, with mined ore to increase from the estimated 1.4-million to 1.6-million tonnes forecast for the 2017 financial year.
“The company is forecasting to mine robust volumes from the high-value south lobe and continuing waste mining to complete the push back at the Karowe mine to fully access south lobe ore,” CEO William Lamb commented.
It is expected that the mill feed will comprise up to 85% south lobe ore during 2018.
The south lobe grades are lower than the centre and north lobes, resulting in lower diamond recoveries; however, the overall higher diamond quality and value from the south lobe results in higher average sales prices, as well as higher revenues and cash flow.
Lucara expects to generate diamond sales revenue of between $170-million and $200-million in 2018, while Karowe’s operating cash costs are expected to be between $38/t and $42/t.
Operating cash costs, excluding waste mining, is expected to be between $21/t and $24/t.
Meanwhile, the diamond miner plans to spend about $3-million in 2018 on a prefeasibility study for the development of a potential underground mine at Karowe.
Costs associated with geotechnical and hydrogeology drilling and additional studies in support of a feasibility study are forecast at up to $26-million for 2018.
Further, Lucara has set a budget of up to $6-million for 2018 to advance exploration work on the company’s prospecting licences.
In line with its strategy of building a diversified portfolio of energy production assets, Aim-listed Kibo Mining will acquire an 85% stake in a company that will hold the Mabesekwa coal independent power producer (MCIPP) project for about £9-million in shares.
Kibo has entered into an agreement with Sechaba Natural Resources, a subsidiary of Shumba Energy, to acquire the stake in a new company to be established by Sechaba (NewCo), which will hold the MCIPP.
The project will comprise a 300-million-tonne subset of the current 777-million-tonne in situ coal mineral resource defined by Shumba at Mabesekwa.
Kibo, which also owns the Mbeya coal-to-power project (MCPP), in Tanzania, plans to build on the work completed to date at Mabesekwa.
"This is a fantastic opportunity for Kibo as we focus on building an energy business with producing assets in multiple geographies. Given this is the first step in pursuing our expanded strategy, we are pleased that the project is ideally located in Botswana, which has one of the best credit ratings in sub-Saharan Africa and a business-friendly environment,” CEO Louis Coetzee said in a statement on Thursday.
Should the transaction complete, Sechaba will own 153.71-million Kibo shares – about 28% of Kibo’s enlarged share capital.
“We are delighted to have concluded such a value-accretive agreement for our shareholders. The transaction shall see us procure London-listed shares in an exciting emerging energy developer to the value of 40% of Shumba’s current market capitalization.
“In addition, we are confident that the partnership with Kibo will see us fast-track the development of a coal mine at Mabesekwa,” added Shumba MD Mashale Phumaphi.
As part of the transaction, Kibo will have first right of refusal over any energy projects that Shumba may pursue over the next six years after completion.
Additionally, Shumba will be granted first right of refusal on any coal export projects that Kibo may pursue over the same timeframe.
The future of Botswana’s mining sector hangs in the balance as eight mines were closed since 2010, shedding more than 7,500 jobs in the process, according to a report compiled by the Ministry of Mineral Resources.
With a population of less than 2 million, the number of jobs lost in the last seven years is a great concern to the authorities. Botswana is dependent on the mining sector and it earns the bulk of its revenue from the same sector.
Minister of Minerals, Sadique Kebonang, informed Parliament through a report compiled by his ministry that some of the mines are still placed under liquidation while others have been reopened.
While Kebonang would not say how many out of the 7,593 people, who had lost their jobs since 2010, were absorbed when some mines were reopened, he said job losses due to closures was a burden to the country’s ailing economy.
Mowana Copper Mine, which was owned by Messina Copper Botswana, was liquidated and closed in 2015 and shed 500 jobs. Kebonang said futures plans for the mine is that it was transferred to a company called Leboam Holdings and resumed operation on April 2017.
Yet another mine called Boseto owned by Discovery Metals Limited was closed in December 2014. He said the mine was since sold to a company called Khoemacau in 2015. Kimberly Diamonds saw its Lerala Mine being closed and placed under maintenance care in April 2017. Liquidation process for this mine is ongoing and 151 jobs have since been lost, he said.
said Tati Nickel Mine owned by BCL Group of Companies was placed under liquidation in October 2016 resulting in 764 jobs being lost while BCL Mine was also placed under liquidation and shed 5,134 jobs.
The minister further stated that BK11 Diamond Mine owned by Monak Ventures was closed in 2012 and 165 employees lost their jobs while Ghaghoo Diamond Mine owned by Gem Diamonds Botswana closed in March 2017 and 263 jobs were lost in the process.
Damtshaa Mine owned by Debswana closed in 2015 and reopened in October 2017 and did not shed jobs, as its employees were transferred to other mines owned by the same company.
The mining sector in Botswana has dominated the national economy since the early 1990s. Diamonds have been the leading component of the minerals sector since large-scale diamond production began 25 years ago. Most of Botswana’s diamond production was of gem quality, which resulted to the country assuming the position of the world’s leading producer of diamonds by value. Copper, gold,, nickel and soda ash production also has traditionally played, though on a smaller scale, roles in the national economy.
After failing to sell at a Sotheby's auction last year, the 1,109-carat uncut stone has now fetched $53 million in a private sale to luxury jeweler Graff Diamonds.
The seller, Canada's Lucara (LUCRF), recovered the huge diamond from Botswana's Karowe mine nearly two years ago. It named it Lesedi La Rona, which means "Our Light" in Botswana's Tswana language.
Lucara had originally hoped to get at least $70 million for the stone, describing it as the biggest gem quality diamond found in more than a century.
Lucara CEO William Lamb said the price paid by Graff topped the highest bid received in the Sotheby's auction last year. But it falls short of the $63 million Lucara received last year for The Constellation, a smaller 813-carat uncut diamond.
U.K.-based Graff Diamonds has a long history of acquiring the precious stones in multimillion-dollar deals. In 2006, it bought the 603-carat uncut Lesotho Promise at an auction in Belgium for $12.4 million.
"The stone will tell us its story, it will dictate how it wants to be cut," said Laurence Graff, who founded the company in 1960.
Lucara announced the sale of the Lesedi La Rona after the market closed Monday, a day when its Toronto-listed shares slumped 1.7%.
The stock soared in the months following the Lesedi La Rona's discovery, but it has plummeted more than 40% since last year's failed auction.
The only larger diamond previously unearthed was the 3,106-carat Cullinan Diamond, which was discovered in South Africa in 1905. The Cullinan was eventually cut into smaller stones, some of which are now part of British royal family's crown jewels.
JOHANNESBURG (miningweekly.com) – Aim-listed Botswana Diamonds has raised £868 576 through the issue of 79.48-million new ordinary shares to take its Vutomi project, at Frischgewaagt, in South Africa, to inferred resources status and to continue its exploration activities.
Pursuant to the receipt of conversion notices from holders of 31.24-million warrants, the company issued 31.24-million shares at a price of 0.85p a share, to raise £265 576.
The company raised a further £543 000 through a private placement of 43.44-million shares at 1.25p a share to directors’ families and investors in Ireland.
Further, Botswana Diamonds chairperson John Teeling and directors James Finn and David Horgan subscribed for new shares at 1.25p a share to raise a further £60 000.
“We are delighted with the response from existing shareholders to this funding. The Vutomi project at Frischgewaagt is very exciting. We, as directors, and our family, are happy to support Botswana Diamonds and delighted that many of our colleagues agree with us,” commented Teeling.
“The Mining Licence for the Lesedi CBM Project is the first application of its kind to be lodged in Botswana,” said Tony Gilby, Tlou managing director.
Tlou Energy Ltd (LON:TLOU) has today confirmed it has lodged an application to the Botswana authorities for the company’s Lesedi coal bed methane development project.
The company, in a statement, said it had now lodged the mining licence application with Botswana's Department of Mines in the Ministry of Mineral Resources, Green Technology and Energy Security.
“The issue of a mining licence will pioneer the development of a new and exciting natural CBM gas industry in Botswana, an industry that will lead to a new indigenous source of energy and employment for the country.”
“Over time it will potentially allow new manufacturing industries to develop using Botswana CBM gas and facilitate the creation of a new renewable energy industry.”
At the same time, Tlou noted that the Ministry has indicated that it will extend the deadline for its Request for Proposal for the development of 100 megawatts of power generation.
Botswana’s Debswana Diamond Mining, a joint venture between De Beers and the southern Africa country’s government, plans to extend the lifespan of its Jwaneng mine beyond 2024, a mines minister said.
The project, known as Cut 9, follows a $3 billion expansion of Botswana’s richest diamond mine in 2010 to uncover 100 million carats of diamond and extend the life of the mine to 2024.
“Cut 9 will be a huge investment by De Beers as it will require a significant capital outlay,” mines minister Sadique Kebonang said late on Tuesday. “We should be able to start Cut 9 in the next two to three years.”
Debswana owns three other diamond mines in the country, one of which was placed under care and maintenance at the beginning of 2016.
Kebonang also said his government and De Beers have also started talks about the extension of their ten-year marketing and sales agreement, which is due to lapse in 2020.
Under the agreement signed in 2010, De Beers shifted more than $6 billion of annual rough diamond sales from London to a Gaborone-based joint venture called DTC to sort, value and sell diamonds to the global market.