Botswana seeks to exploit its coal reserves

Botswana will lift a moratorium on new prospecting licences for coal, coal-bed methane (CBM) and related minerals by the end of September, a government official said on Friday.

The Southern African nation had suspended new licences in June, pending finalisation of a new strategy for the coal sector.

Botswana’s Trade and Industry Minister Dorcas Makgato-Malesu said the suspension of licensing allowed the government to “go back to the drawing board, come up with a roadmap that is more strategic, more focused, more thought through, as it were, and aligned to the national vision and national strategy of diversifying”.

Botswana must also diversify from its diamond sector, which generates half of Botswana’s revenue and a third of gross domestic product, Makgato-Malesu, told a mining conference in Australia.

“We are on an aggressive agenda to intensify our economic diversification … there’s more to Botswana than just diamonds,” Makgato-Malesu said.

“It’s important that we diversify from diamonds because it’s not a very good strategy not to diversify.”

Encouraging investment
Botswana’s Coal Roadmap, put together by consultancy Wood Mackenzie, is a strategy on how to optimise benefits from the country’s estimated 212-billion tonnes of coal reserves.

Exploration rights for coal and coal-bed methane are among the most popular licences sought in mineral-rich Botswana.

Demand peaked in 2009 when 50% of all prospecting licences were for exploring for coal, CBM and related minerals.

Botswana believes that its coal and gas reserves have the potential to grow into an industry as big as the diamond industry.

Makgato-Malesu, who was on a tour of several Australian cities to encourage investment in Botswana, indicated that the country would also be open to investment from China, Africa’s number one investor.

Chinese investment
“Investment is investment. As long as you have parameters that you have set up that are applicable to all, it then becomes irrelevant whether it’s Asian or whatever else,” Makgato-Malesu said.

“If the Chinese come into any investment destination and play upward into the rules, well and good.”

So far, China’s investment in Botswana has been largely in infrastructure and China has not ventured into mining in Botswana yet, she said.

Makgato-Malesu said Asia will likely be a key customer for its coal, as well as Europe, but added that African countries may also become significant consumers over time.

“A lot of the time, we look at Africa as a provider of resources … you also have to look at us as a consumer of the very resources that we produce,” she said. — Reuters

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