African Energy finalises Mmamantswe partnership

BG REPORTER
Thursday, 11 February 2016
SHINING BRIGHT: Lucara’s “Lesedi La Rona” diamond which was discovered at Karone mine in  Botswana. [See story on page 18] SHINING BRIGHT: Lucara’s “Lesedi La Rona” diamond which was discovered at Karone mine in Botswana. [See story on page 18]

African Energy Resources (AFR) is working on finalising the selection of a development partner for its Mmamantswe power project in Botswana, the company has revealed.

South Africa recently requested registrations for its 2,500MegaWatts coal base-load independent power project procurement (IPP) programme, which is open to cross-border projects. The company has registered a 600MW power project at Mmamantswe into this programme. In the information presented at the investor conference in Cape Town this week, the AFR management revealed that cross border IPP proposals are likely to receive close attention. 

“Subject to necessary approvals, AFR will sell the project company to the development consortium for US$20million if the consortium wins the tender and is able to achieve financial close,” the company said. AFR headed by Frazer Tabeart, as its Managing Director, indicated that a qualifying criterion and the documentation for cross border projects are yet to be released.

African Energy, which boasts a market capitalisation of more than P800 million at BSE is upbeat its proposals, will be considered based on a number of factors. The 1.25 billion tonne Mmamantswe coal project is only 20kmfrom the international border with South Africa and is close to the regional power transmission grid.

Mmamantswe has an approved Environmental Impact Assessment for up to 10Mtpa coal mining and up to 2,000MW of power generation. Mmamantswe also has an 8GL/a registered water well-field at Artesia which could provide enough water for such a project. Technical studies have demonstrated the suitability of Mmamantswe coal for processing into a power station fuel similar to that used in the adjacent Waterburg coalfield in South Africa. 

Other AFM projects
Sese integrated power project comprises a power station complex with its own captive coal mine. The Sese coal licence contains 5 billion tonnes of low strip ratio coal providing significant potential for expansion of generation capacity. The initial development concept is centered on an initial 300MW power station (2 x 150MW CFB boilers) with a captive 1.5Mtpa coal mine. Additional 300MW developments are proposed as capacity is contracted.

Recently a Joint Venture Agreement was executed with First Quantum Minerals to develop power generation capacity at Sese. This agreement provides the company with a development partner with a strong track record in developing large-scale capital projects. It also provides a sound financial partner who is responsible for providing the necessary funding for the project development.

Mmamabula West
The 2.4 billion tonne Mmamabula West export coal project was acquired in late 2013 on the basis of its large size and export quality coal. Mmamabula West comprises two 4m to 6m thick coal seams, with the upper K-Seam averaging 105m depth below surface, and the lower A-seam 130m depth.

A Prefeasibility study for an underground mine based on a 200Mt portion of the A-Seam within the indicated resource has been completed. The study evaluated a 4.4Mtpa ROM operation producing up to 3Mtpa of 6,200kcal/kg export coal over a 20-year mine life. The study envisaged initial capital cost estimate of U$113M for an owner operated mine and processing plant, and an estimated ROM operating cost of U$17/t.

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