African Energy Resources
African Energy Resources: Conceptual Design for the 300 MW Sese Power Station

African Energy Resources advises that the Department of Environmental Affairs (EIA) in Botswana has approved an updated Environmental Impact Assessment for the Sese Power Project to allow up to 500 MW of power generation and the associated coal mining and coal processing activities.

Southern Africa – African Energy Resources notes that this is subject to the standard conditions of such approvals in Botswana, including a requirement that the project be implemented within two years.

This marks an important milestone for the project as it will allow for the development of two 225 MW units, rather than two smaller, less efficient 150MW units as contemplated under the original EIA approval.

Work is continuing on the development of Sese Power Project in which AFR currently owns a 35% interest.

AFR continues to assist First Quantum Minerals the majority owner of the Sese JV, with a number of commercial and permitting activities related to the development of the project as an exporter of power to FQM’s Zambian copper operations.

Current activities at Sese

  • Implementation of the resettlement action plan (RAP) around Sese, under which 25 households have  to date had their grazing rights, water bores and access trails relocated to outside the Land Rights Lease. Re‐settlement of a further three households is required to complete this process, which has been jointly monitored by Sese JV staff and the Tonota Land Board
  • Negotiations with the Botswana Energy Regulatory Authority for a Generation and Export Licence
  • Negotiations with Botswana Power Corporation for a Grid Connection and Use of System agreement
  • Ongoing negotiations relating to the commercial aspects of importing power into Zambia
  • Negotiations with other credit‐worthy off-takers for the remaining 88 MW of power available from development of the first 225 MW unit at Sese

Mmamabula West project update

African Energy Resources notes that there has been a sustained increase in global coal prices over the last twelve months, with current prices being approximately US $102/t for RB1 spec coal and $85/t for RB3 spec coal (FOB Richards Bay).

The higher coal price may provide renewed export opportunities for African Energy Resources’ Mmamabula West coal project which contains 2,443 Mt of Indicated and Inferred Resources of thermal coal.

Prefeasibility studies undertaken for African Energy Resources in 2014 indicated that this
deposit could be extracted using conventional underground mining methods to produce ROM coal suitable for South African power stations for approximately US $15 per tonne at the mine gate.

The study also indicated that RB3 spec coal could be produced for US $25 per tonne at the mine gate.

African Energy Resources believes that the Mmamabula West project may be an attractive source of coal for South African markets and has commenced a process to identify a suitable project level equity partner to help develop this opportunity.