- Could produce around 1.5 million tons of coal per annum in 25 years
- The project has 1.2 billion tons of high grade open cast mineable coal
Botswana Stock Exchange (BSE) listed coal mining and Independent Power Producer Shumba Energy has expressed confidence in its newly acquired Morupule South coal project, saying the project could produce around 1.5 million tonnes of coal per annum in 25 years.
In its shareholders update last week, the company stated that Morupule South prospecting area consists of a strike distance of approximately 30km with 50% of the strike for possible opencast mining and 50% for underground operation.
According to the update the project has 2.45 billion tonnes of coal with 1.2 billion suitable for open cut mining. “The Morupule South acquisition elevates Shumba Energy to be able to take advantage of the domestic and regional industrial market. The project has 1.2 billion tones of high grade open cast mineable coal, is located 5 kilometers from an operating rail siding and can be brought into production within a very short timeframe. These factors set the project ahead of other coal development projects in Botswana,” said the company Managing Director Mashale Phumaphi. The company stated that given the advanced nature of the exploration activity conducted, coal production can be achieved in a relatively short time and study results have confirmed robust economics for the project and when compared with other projects in the region it is expected to be one of the lowest in costs.
According to Shumba the terms of acquisition are that an immediate cash payment of USD1.4 million be paid to the initial owners of the project, Hodges Resources and a further payment of USD1 million due 1 year after production.
Shumba Energy management has indicated that following the acquisition their company has around 4.5 billion tonnes of coal resources in Botswana and stated that the entity now owns a significant portion of coal projects in this country.