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Shumba Coal Corporate Brochure
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WRITTEN BY DJAMIL BENMEHIDI
It is a simple fact; energy is the key to economic growth and throughout much of the world, coal is still the only viable source of energy. A global backlash against nuclear energy in the wake of the Fukushima disaster in Japan, improvements in clean coal burning technologies and a crippling power deficit in the Southern African regions have opened up huge potential markets for Botswana’s considerable reserves of high-quality thermal coal.
Shumba Coal - a private exploration company whose focus is the acquisition and development of highly prospective coal exploration licenses in Botswana – has a vision to become Botswana’s premier coal exploration, development and production company, without compromising on its dedication to the improvement of its country and its people; a vision that it is now tantalisingly close to realising.
Mashale Phumaphi, Managing Director of Shumba Coal, spoke to Endeavour Magazine about the story of the business and its plans for the future.
POWERING FORWARD
In reality though, Botswana’s
continuous double digit
economic growth faces a
major challenge as a result of
a chronic power supply deficit
which now affects the entire
Southern African region,
including local powerhouse
economies such as South Africa
and Zimbabwe. With Botswana’s
power supply-demand outlook
indicating that demand for
energy will exceed supply from
2016 onwards, it has become
a matter of great urgency for
Botswana to identify new,
alternative power sources.
Fortunately for Botswana,
the nation is home to an
estimated 200 billion tons of
coal and Shumba Coal has a
remit to play a leading role in the
development, production and supply of thermal coal in Botswana.
With it possessing a wide portfolio of coal exploration assets, local
knowledge and expertise Shumba Coal is very much at the forefront
of Botswana’s fledgling energy renaissance.
“We are the first private owned company within this field in
Botswana and we are strongly focused on the development of the
country’s coal exploration and mining industry for the benefit of the
country and its people. Shumba Coal is a citizen-owned company with
an extensive knowledge of local markets and culture which we believe
gives us a strong competitive advantage.
At present we have over $USD21.5 million in assets and
resources, and are listed on both the Botswana and Mauritius Stock
Exchange. Shumba Coal is in its infancy and we have just completed
feasibility studies of sites and staff training. Botswana has the largest
undeveloped coal reserves in Africa and the power supply crisis that
is affecting our local region is something we can help with. In global
terms we are benefiting from a move away from nuclear power
stations by the energy industry after the Fukushima disaster in Japan,
and improved technology which has made it possible to build clean
coal burning power stations which produce next to no emissions.
These emerging local and global markets mean there is real growth
potential for a Botswana energy export industry.”
SHUMBA COAL
The sub-Saharan nation of Botswana - which lies just north of neighbouring South Africa and south-west of Zimbabwe - has come a very long way since its birth in 1966, following independence from Great Britain. Having started life as one of the poorest nations in Africa with a GDP per capita of $70, Botswana has embarked on a journey of economic transformation which has seen it develop into the politically stable and thriving middle-income country that it is today. And with the economy currently one of the fastest growing in the world, and with its small population of two million people benefiting from the fourth-largest gross national income in Africa and a GDP per capita of $14,000, on the surface Botswana looks well placed to take off over the coming years.
Endeavour Magazine | 67
Mashale Phumaphi, Managing Director of Shumba Coal
shipping. Overcoming this issue is
something of a matter of urgency
for the company, and as a result
two consortiums have recently
tendered plans to construct
two separate railway lines -
The Trans-Kalahari route shall
terminate at ports in Namibia
and the Ponto Techobanine
rail route will terminate at the
Mozambique port. In addition
to this, a further line to the Port
of Durban is anticipated. At
present, significant engineering
and financial hurdles remain
but Shumba Coal will have the
capabilities to export thermal
coal to every corner of the globe
upon completion of construction
work.
Another crucial step in the
development of the business
over the coming years will
be the development of the
company’s future mining assets,
in particular Shumba’s Secheba
Thermal Project. The first stage
of this will see Shumba begin a
full Preliminary Feasibility Study
and full Environmental Impact
Assessment at the Secheba
Thermal Project, following the
recent completion of a Positive
Scoping Study. This site is the
company’s most advanced
project to date, and with the two
main coal seams holding reserves
of an estimated 1 billion tons of
JORC compliant high-quality
coal, it is considered imperative
by the business to develop the
area so that it is ready for mining
SHUMBA COAL
As Mashale suggested, Botswana’s large and considerable
reserves of coal will be much sought after, in light of recent studies
which indicate that global demand for high-quality thermal coal has
increased greatly. The dynamic economic growth of the Asian region,
especially China and India, means that there are very strong growth
markets to exploit within these energy-hungry economies and it is
this growing Asian market that Shumba Coal anticipates will drive
demand for coal over the coming decades. Closer to home, there
is also scope for Botswana to use its coal to generate power and
monetise its thermal coal resources in its own local area. As is the case
in Botswana, neighbouring countries like South Africa, Zimbabwe,
Namibia, Swaziland and Lesotho are all expected to reach the stage
where demand for energy outstrips supply over the coming years
and though these markets are restricted by their smaller economies
and will be less lucrative then the Asian markets, they are also more
accessible.
However before Shumba Coal and Botswana can begin to take
advantage of these market opportunities, there is still much work
to do to make the company fully operational. Firstly, the biggest
challenge that Botswana has in relation to exporting coal is the lack
of a suitable rail network to facilitate movement of coal to port for
by 2015/ 2016. Secheba Thermal Project’s close proximity to existing
infrastructure such as the Francistown highway and a main rail link
between Zimbabwe and South Africa will give Shumba access to these
markets, as well as other energy hungry local markets in Zambia,
Angola and Malawi; an important first step indeed for the business in
realising its ambitious future goals.
“As the world’s power requirements continue to grow then the
demand for thermal coal in the medium to long term shall continue to
increase as there is no immediate obvious substitution for coal based
power. In relation to the current weak global economic market we
strongly believe that in the medium to long term the global economy
shall recover and that the growing middle class in the developing
markets of the world shall continue to have a ferocious appetite for
power. As a result we believe that our 5 year prospects are very good,
particularly considering that there could be a significant expansion of
Botswana’s Coal industry.
I would like to say that Botswana has successfully retained its
image as a politically stable investment destination over the last few
decades and the time is very opportune for it to monetise its coal
resources given the regional power shortage and the increasing
global demand for thermal coal.”
A NEW PAN-AFRICAN LEADERMarsh BotswanaTel: +267 318 8000www.marsh-africa.com
Marsh’s global industry practices and
risk specialities ensure our clients
receive the BEST SOLUTIONS tailored
to their particular needs, helping them
.MANAGE RISK FOR GROWTH
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ShumbaCoal_Botswana_Apr2013
19 April 2013 02:42:27 PM
“In relation to the current weak global economic market we strongly believe that in the medium to long term the global economy shall recover and that the growing middle class in the developing markets of the world shall continue to have a ferocious appetite for power.”
SHUMBA COAL
00267 318 6072
WWW.SHUMBACOAL.COM
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