New Delhi, India — 10 September 2012 – Jindal Steel & Power, a unit of India’s US$17 billion Jindal Group “’ one of the largest corporate groups in the country “’ has finalised its widely expected takeover of Toronto-listed CIC Energy Corporation in a deal valued at US$116 million.
Miningmx reports that the Indian firm said the offer, which also has the blessing of Botswana minerals minister Ponatshego Kidikilwe, would put it in line to supply 1,200MW in power to Botswana.
“This acquisition makes Jindal Africa the frontrunner for building a 1,200MW power plant in Botswana for the supply of power to South Africa,” said Ashish Kumar, CEO of JSPL subsidiary Jindal Africa, in a statement.
Kedikilwe, who doubles as the country’s vice-president, said last month that the 600MW expansions that Botswana was planning this year “cannot be enough, otherwise the economy will come to a halt”. He added that “we need another 300MW of power in about two to three years’ time and another 300MW in 2018 to 2020”.
Kedikilwe added that Botswana’s economy across the board, including other infrastructure build programmes such as the search for water, was delicately balanced. “We are in a precarious situation that has to be handled carefully.”
In the short- to medium-term, Botswana’s government has issued two tenders for an independent power producer to build 2 x 300MW power stations. One would be a brownfields development near Morupule, the country’s only operating coal mine.
The investment is a major boost to Botswana’s energy industry, which South African president, Jacob Zuma, said on a recent two-day visit could help relieve his country’s power supply deficit.
At some 212Bt, Botswana is home to 60% of Africa’s coal resources, but has little in the way of production. However, some 190 coal and coal bed methane prospecting licences have been issued to 43 companies. These include the likes of Continental Coal, African Energy Resources, Asenjo Resources and Australian-listed Hodges Resources.
CIC Energy’s coal property, the Mmamabula coalfield, stands at some 2.4Bt and has been drilled by CIC Energy more than all other coal properties in the country combined. However, CIC Energy was frustrated in signing a 30-year, 1,200MW power supply contract with Eskom, which subsequently led to it suspending the Mmamabula project, despite having ploughed US$150 million into developing it.
In addition to Botswana, Jindal has invested in Mozambique’s coal industry, most recently winning approval to build a 2,640MW coal-fired power plant in the country’s Tete province. The plant, which is estimated will cost US$3 billion, is expected to start operating in 2015 with the power due to be sold domestically and to the Southern African region.
Source: Miningmx. For more information, click here.