March 04, 2010, 12:47 AM EST
By Carli Lourens
March 4 (Bloomberg) -- South Africa’s state-owned lender is studying investment in a “huge” Botswana coal project to fuel power plants and stave off the risk of blackouts in the region.
“We need more feedstock for our power plants,” Abel Malinga, the head of lender Industrial Development Corp.’s strategic business unit for mining, said by mobile phone.
Eskom Holdings Ltd., South Africa’s government-run utility, faces a coal shortage because growth of domestic output isn’t keeping pace with demand, Brian Dames, head of generation, said Jan. 27. A lack of generating capacity and low coal stockpiles forced Eskom to cut power to gold and platinum mines for days in 2008, while South African homes were hit by rolling blackouts.
“It’s a huge resource, the same size if not bigger than what they’re looking at Mmamabula,” Malinga said yesterday. Mmambula, an extension of the Waterberg field that holds more than 40 percent of South African coal resources, is owned by CIC Energy Corp. and contains an estimated 2.6 billion metric tons.
The lender invited bids to study the Botlhapatlou resource in Botswana’s southern Kweneng district, where work decades ago indicated reserves, Malinga said. Assuming the site is viable, the IDC will offer investors the right to own and operate the site covering about 27,000 hectares (66,717 acres), he said.
The field may contain export-grade fuel that can be shipped on the proposed Trans-Kalahari railway line to Namibia, Malinga said. IDC is also looking for coal in Zimbabwe, he said.
Investors are concerned about power supply in South Africa, the biggest platinum and ferrochrome producer. Ferrochrome capacity growth in the country is unlikely in the next three years, “courtesy of Eskom,” Steve Phiri, chief executive officer of producer Merafe Resources Ltd., said March 2.
Source: http://www.businessweek.com/news/2010-03-04/south-african-state-lender-studies-huge-botswana-coal-project.html
Comments
Post a Comment