A railway line to transport coal from Botswana to a port in Namibia could be built within five years from now, in time to allow Canada-listed CIC Energy to export part of its coal, the firm said on Wednesday.
CIC is developing the Mmamabula coal project in Botswana, meant to supply power to South Africa and also coal for exports.
Once granted government approval, a feasibility study for the 1 500km Trans-Kalahari line would be launched within the next six months, Eddie Scholtz, CIC’s chief operating officer for mining, told Reuters on the sidelines of a coal exports conference in Cape Town.
The line is expected to be completed about a year after the Mmamabula energy project comes on stream, Scholtz said.
CIC, which plans to export between about 16-million tonnes of coal per year through the port at Walvis Bay, joined a consortium with other producers and development agencies to make the project more feasible and gain economies of scale.
“Increasing the tonnage to 50 to 54-million tonnes per year makes the project much more viable and robust,” Scholtz told Reuters.
The consortium includes diversified miner Exxaro, AIIM, Maropule, the Industrial Development Corporation (IDC) and the Development Bank of Namibia.
Logistical constraints on the railway lines have been a major headache for South African coal producers eager to ship more of their product to Asia to satisfy growing demand.
While CIC is not excluding exports out of the Richards Bay Coal Terminal in South Africa and the Dobela port in Mozambique, the Trans-Kalahari line seems to be the best option for now.
Scholtz said the company had received significant interest for its coal from Europe.
“There’s enormous appetite from Europe not only because of the high grade, but also because of the fact that we are looking at the west coast which does offer them shipping advantages,” he said.
Scholtz said it would cost between $2- and $4-million to build a kilometre of rail.
CIC’s Mmamabula project has been delayed by six to 12 months because of a lack of a power purchase agreement with South Africa’s utility Eskom, but Scholtz said CIC will seek to expedite some work to make up some of the delay. – Reuters