Coal-focused company African Energy Resources (AFR), listed on the Australian and Botswana stock exchanges, has developed a strategy aimed at providing power to the energy-deprived southern African region. This means taking an integrated approach: developing mine-mouth power stations to feed off captive supply, which they will provide from the company’s three large-scale deposits in Botswana, writes Laura Cornish.
If you are in coal, the reality is that your greatest opportunities (at least for the next two or three years) lie in power generation,” MD Frazer Tabeart starts. “Because our asset focus is in Botswana, where there are significant volumes of coal, we are well positioned to take advantage of the demand for energy in the region. In the longer term however, there is also substantial opportunity for export from our projects, when the current inhibiting factors relating to export are resolved.”
It is common knowledge that the coal industry in Botswana is under-developed and as a result lacking in export volumes due to the long distance the coal needs to travel to reach the coast, the coal quality which in some cases is lower than typical South African deposits, current low coal prices and a rail system unused to handling bulk commodities.
Taking these scenarios into account, AFR has taken ownership of some of the country’s best deposits, which between them comprise coal well suited for power generation as well as export.