Modern Mining August 2018

COAL

outsourced model will be adopted. “We have already lined up the plant operator while we have a shortlist of well qualified companies based in Botswana who can undertake the opencast mining and expect to make a contract award later this year,” he says. Nell, who is well-known in South African coal mining cir- cles, has more than 35 years’ experience in the industry. His past appointments include a four- year tenure as CEO of the TSX-listed Homeland Energy, which included managing the develop- ment of the Kendal coal mine near Delmas in Mpumalanga. Turning to the proposed Phase 2 of the Mmamabula project, Badenhorst says that Maatla’s view has evolved during the time it has held the project. “We initially looked at an IPP solution using 30 MW modules, as it is a lot easier selling 30 MW into the market than the 300 MW that some of the potential coal producers in Botswana are looking at for their mine-mouth power projects. The capex, of course, is also much lower. We’ve now, how- ever, selected GTL as the best way to proceed in Stage 2. We’ve received an expression of inter- est from Botswana Oil for diesel offtake and an expression of interest for funding of the com- plete project.” The technology for a viable, relatively small- scale GTL project is, says Badenhorst, readily available from two US-based companies which Maatla has identified. “The first part of the pro- cess would be to generate Syngas – Co and H 2 – from the coal and then use this as the feed to a modular plant which would produce the liquid fuel. This plant would be based on new tech- nology developed by our envisaged US partner although, at its heart, is the well-established Fischer-Tropsch process,” he explains. “The project would produce 3 000 barrels per day, which is approximately equivalent to 160 to 180 million litres per annum. We’ve submitted a proposal to Botswana Oil and are expecting the adjudication to take place this year.” On the timing of the Phase 2 project, Badenhorst says this will be dependent on securing an offtake agreement. “Once this is in place, we envisage that it would take nine to 12 months to complete a feasibility study and a further 18 to 24 months to implement the project. So the earliest date for first production would be 2021. The capex is likely to be around US$250 million. We are very optimistic that Phase 2 will go ahead and that it will contribute to making Botswana, which currently imports all its petrol and diesel from South Africa, self- sufficient in liquid fuels,” he concludes. Report and photo by Arthur Tassell

IRR is estimated at above 50 %with payback on the estimated capex of BWP 407 million being achieved in two years. Describing the planned mine, Badenhorst says that it will be an opencast operation initially – starting with Area A – although underground methods using continuous min- ers are also within the mine plan. “Our total resource on a mineable tonnes in situ (MTIS) basis is 90,39 Mt with Area A accounting for 5,77 Mt, Area B 7,72 Mt and Area C the balance of around 77 Mt.” He adds that the mine will exploit two coal seams, D1 and M2, with D1 having a thickness of 4 m and M2 3,3 m. The planned washing plant will comprise a crushing circuit, a DMS circuit, a spiral plant, an administrative office and a full metallurgical laboratory. The facility will have a capacity of 170 000 tonnes per month ROM and will pro- duce a sized product for the regional market. It will also have the flexibility to produce RB1/ RB3 quality coal for the export market. The project works will include the construc- tion of a new rail siding 20 km from the mine at the Tropic of Capricorn. Says Badenhorst: “We anticipate that our product will be shipped to market either by truck or rail, with prob- ably a 50:50 split between these two means of transport. Looking further ahead, we’re ideally situated to make use of the planned Waterberg rail link which would link the Waterberg area in South Africa with the Botswana rail network. Our understanding is that this link could do up to 20 Mt/a, which would definitely be sufficient to open up the entire Mmamabula coalfield – and indeed other coalfields in Botswana. Having said this, the project is totally viable based purely on existing rail capacity supple- mented by road haulage.” Maatla is confident that it will have little difficulty selling the product from the new mine. Dr Mike Seeger, Business Development Director, says the company has carried out a very intensive market study. “We’ve worked backwards from the market study, reverse engineering the project, if I can put it like that, based on very conservative market projections on the demand for coal within our region,” he states. “We’ve noted major interest, for exam- ple, by several regional customers for nuts, peas and duff who are prepared to pay – on aver- age – export parity prices for sized coal at the mine gate. We also, incidentally, have a distinct advantage over South Africa’s highveld coal mines when it comes to supplying the cement and lime industry in the Northern Cape.” As regards operation of the new mine, Mike Nell, who is Maatla’s COO, says that an

“We’ve worked backwards from the market study, reverse engineering the project, if I can put it like that, based on very conservative market projections on the demand for coal within our region.”

August 2018  MODERN MINING  39