SA eyes Botswana coal as local mines twiddle their thumbs

South Africa is eyeing Botswana’s high-grade coal deposits along its border with that country, where banks and pension fund managers dabbling on the stock exchange in Gaborone see no harm in investing in the extraction of the much-denounced mineral for whatever purpose it serves.

And although South African banks have roundly turned heel on writing loans for new coal-fired power stations, local financial institutions are not averse to investing in related extraction ventures – as long as their lenders don’t burn fossilised rock.

Yet mining companies in South Africa, said Xavier Prévost of XMP Consulting, were slow on the uptake after Eskom recently indicated that it was not viable to cut down let alone cancel its reliance on coal.

According to the coal analyst the hesitation among local mining companies to take the bait is because of executive vacillation at Eskom, making it difficult to decide whether to mine or not if your principal client can’t seem to be making its mind up about clean or fossil-fuelled energy.

In the meantime Botswana’s existing colliery, Morupule, has indicated that it’s looking at increasing capacity to cater for South Africa’s coal needs.

With 213 billion tonnes of the highest graded coal on the continent, which also totals about two thirds of Africa’s reserves, Botswana will soon have two new coal mines managed by Maatla Energy and Minergy.

And like Morupule, they have also indicated that they could meet South Africa’s sustained hunger for coal.

Maatla CEO Jacques Badenhorst told resources writer Lisa Steyn that Botswana’s investor friendly business environment, characterised by a “favourable tax regime and no foreign exchange controls”, made cross-border coal deals very attractive for South Africa.

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