Morupule Coal Mine aims for P3 billion revenue as global demand rise

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  • Targets 10 million tons per annum to meet global demand
  • Demand for Botswana coal at an all-time high — regionally and globally
  • Opportunities in the Middle East, Asia and European markets.

The Projects | Coal 

Buoyed by the rising coal demand globally, Morupule Coal Mine aims to generate P3 billion in revenue by 2027, a goal that is reinforced  among others by; technological capacity, sustainable partnerships, operational excellence and capacity development.

A strategy is currently being coiled to transform Morupule Coal Mine into a significant player in the global coal space. Under the captainship of General Manager Mr. Edwin Elias, former Debswana Head of Ore Processing, MCM intends to produce 10 million tons of coal per annum in response to increasing coal demand across key global markets.

Mr Elias has been utilizing every opportunity to project the company’s vision, including recently at the Botswana – Poland Business Forum, which was organized by the country’s investment promotion agency, Botswana Investment and Trade Centre (BITC) in collaboration with Embassy of Poland in Pretoria.

At the forum, held in Gaborone on the 5th of July, Mr Elias indicated that Morupule Coal Mine is aiming to improve revenue from P1 billion to P3 Billion by 2027. Morupule is currently producing 2.8 million tons of coal per annum from its underground mining operation. Annual output will increase to 4.2 million tons per annum when Motheo Project, the P1.7 billion expansion project, starts to produce in August 2022.

In May this year, during a media tour, Mr Elias revealed that the 10 million tons of coal per annum by 2027 is a target in response to the increasing coal demand. 

“The way our coal is in demand, we might need to ramp up production to 10 million tons per annum before 2027, countries, industries and lucrative markets are demanding our coal and the prices and very good,” he said.

EXPORT MARKET 

In April 2021, Morupule Coal loaded its first train of coal to supply overseas global markets. The first trial run coal to reach Maputo Port by rail via Zimbabwe was successfully delivered, to date eight (8) train loads have been delivered to the global markets via Maputo seaports. 

Botswana’s coal production has been limited, for years just over 2 million tons mostly used in electricity generation by Botswana Power Corporation at its Morupule power plants and in small quantities exported to neighbouring countries. MCM says it is now looking into ramping up production in order to cash in. 

The coal mining industry has experienced a significant increase in coal prices since the beginning of the year, companies including Morupule Coal Mine are now scrambling to pump up production and benefit from high prices.

“Our current production may not be enough for us to take advantage of the current global demand,” Mr Elias told members of the media in May this year. 

We have lots of coal traders who have been sending enquiries, MCM has been identified as a potential solution, we have a lot of countries lined up, and we are exploring potential partnerships with them. We believe we will be able to harvest this opportunity,” he said. 

MCM recently signed two contracts to export P54 million worth of coal to Asia and P190 million worth of coal to Europe through Maputo, Mozambique. In addition, they are also in talks with Poland to export coal to their country. 

“We are selling to coal traders who are targeting the European markets. We are not specific to any country and are currently selling to Glencore, which supplies European markets. Our clients are mostly in Europe and Asia,” he said. 

MCM is currently exporting to Namibia, South Africa, and Zimbabwe. COVID-19 has completely reshaped global coal markets, as coal is expected to be the next major source of power generation. To meet the demand, the GM said they are working on ramping up production. The mine is in plans to build an additional plant. 

“We are currently in an optimization drive to double our capacity with 10 million tons per annum, we believe if we can push ourselves, we will be able to capitalize on the opportunity at the end of the day. And that is possible and can be done in the shortest time possible. The board has challenged us to accelerate these plans so that we don’t miss out on the opportunity,” he said.

COAL INTERCEPTED AT MOTHEO PROJECT

On 4th of June 2022 Motheo Project intercepted its first coal, marking a significant milestone in the project that will expand Morupule Coal Mine production from the 2.8 million tons per annum to 4.2 million tons. 

To date, all components of the project are in shape with the coal handling plant and conveyor system being prepared to receive the first coal next month (August 2022)

Speaking to The Projects Magazine, Motheo Project Manager Mr Lefika Moagi said with the increasing demand of coal, Morupule is still going to be quite busy.

 “There might be need for another coal handling and processing plant because the key thing is the plant,” he said. “With open cast we can  increase tonnage anytime when a need, arise, so depending on our economics there might be another project in the offing to build another plant  because our coal is top grade and lucrative markets are calling.”

 The Morupule Motheo Project was officially kick-started by President Dr Mokgweetsi Masisi in November last year. When official ground breaking the P1.7 billion project, President Masisi said that mining remains one of the most important economic sectors which holds the key to transforming Botswana to an Upper Income Country. 

“Our mining industry, as you may all know, is dependent on diamonds, which is limited in scope for our revenue base. It is against this backdrop that, Government is pursuing measures to expand its revenue base to other minerals, including coal”

He noted that the 212 billion tons is largely untapped coal reserves that Botswana sits on therefore require the country to take steps to sustainably use them for the socio-economic development. 

He highlighted that Botswana is experiencing a shortage of electricity with only 60 percent being generated locally, and thus coal from Morupule Mine remains the predominant source of energy, feeding both Morupule A and Morupule B power plants, to meet the country’s power demands, mainly base load generation.

The President hailed the Motheo expansion project, noting that it assist Government’s efforts to increase rural electrification and village connectivity as per its promise to Batswana.

President Masisi said his government was aware of the sensitivity surrounding coal mining and the utilization of natural resources, particularly from the point of view of sustainability. 

“For us to maintain a sustainable environment does not mean that our natural resources should not be used. Rather, sustainability requires a balanced approach to development, that is; to sustainably harness and manage the natural resources, which we are endowed with, for sustainable economic growth and for the benefit of our people,” he said. 

Masisi reiterated Botswana’s commitment to sustainable energy sources: “I want to emphasize that we are committed to our international obligations, to contribute to the reduction of carbon emissions, some of which result from the conventional generation of electricity using coal.  We have developed an Integrated Resource Plan (IRP) and a Coal Road Map to guide efforts for the sustainable exploitation of the vast coal resources, through the use of clean technologies, while at the same time deriving maximum benefits for sustainable economic diversification and job creation.”

Botswana is a signatory to the United Nations Convention on Climate Change and has signed the Paris Climate Change Agreement.

Masisi noted that the Government has committed to reduce carbon dioxide emissions by 15 percent by 2030. Morupule Coal Mine drives a programme towards this national effort to reduce its carbon dioxide emissions from 45 kilotonnes per annum to circa 30 kilotonnes per annum, through deploying technologies such as electric utility vehicles in the mining areas from January 2022. 

Speaking during the official groundbreaking 6 months ago Morupule Coal Mine General Manager Mr Edwin Elias Speaking during the official groundbreaking ceremony of the Motheo Project Morupule Coal Mine newly appointed General Manager Edwin Elias said for almost 50 years, the role that coal has played and continues to play in securing Botswana’s energy needs and the  economic potential the resource has in supporting the Botswana’s  economic diversification efforts, as well as maintaining the country’s socio-economic stability can never go unnoticed. 

“We are very proud of what coal has done to our economy and the limitless opportunities it presents to us going into the future. We are determined to maximize on the utilization of the vast coal resource endowment which our country enjoys, and the Motheo Project must bear testimony to the actualization of that determination,” he said. 

Elias underscored that the Motheo Project will catapult Morupule into new global heights, the likes of which the company has never reached before. 

“We want to increase our share in the regional market and eventually increase our presence in the seaborne and international markets. The demand for coal globally has increased, and we wish to fulfil the prevailing demand while at the same time thinking of alternative uses which can be undertaken using modern mining methods and coal beneficiation techniques that are environmental-friendly and sustainably adaptive,” he noted.

He said MCM’s vision is to be a leading coal energy business: “Therefore, we will transition towards this through introducing new technologies, promoting innovation and digitization to our mining methods and business processes.”

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