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Shumba Energy to accelerate growth plans on the back of higher coal prices

The increased capacity of the Matola Coal Terminal and high physical coal prices present a good opportunity for coal development companies, Shumba Energy said in a statement.

The company, which has four coal projects underway in Botswana and sits on 2 Bt of the country’s thermal coal, says these two factors will allow Shumba Energy to accelerate exports and generate revenue to bring forward its planned growth.

Shumba Energy says its primary focus is the development of power stations in Botswana to address the power challenges in southern Africa.

Shumba recently received the go-ahead for its proposed 600 MW power plant at Mabesekwa and Botswana’s ministry of environment, wildlife and tourism has approved the company’s environmental and social impact assessment for a proposed coal mine and associated power station at Mabesekwa.

In addition, Shumba Energy has received the green light after submitting a scoping report for the Sechaba Coal IPP project station and associated 400 KV transmission line.

The Matola coal terminal’s annual export capacity reached 7.5 Mt in 2013 and is set to increase to more than 20 Mt during the planned phase 4 expansion. This phase of expansion is currently in the advanced feasibility stage.

“Grindrod, Mozambique’s national railway company CFM and Transnet Freight Rail are working closely to create export capacity for the established and junior coal mining communities of southern Africa,” says Shumba.

Shumba Energy also made its case for coal exports from southern Africa by pointing out that physical coal prices have risen to the highest level since the start of 2014, with the spot price currently at $97.25 per tonne, up from $48.80 a tonne in January.

China accounted for 50% of world coal consumption in 2012 and its coal use is set to grow through 2025. India’s growth in coal consumption is projected to jump from 8% in 2012 to 14% in 2040, according to Shumba.