Botswana: Company Brings Hope to Medie

Medie — Coal mining company, Minergy Limited has breathed new life into the once isolated and dull settlement of Medie, located some 20km south of Lentsweletau in the Kweneng District.

The Lentsweletau/Medie road, formerly full of rough patches and pot holes, is now smooth and covered in suppression dust thereby making life easier for residents, mostly cattle ranchers and small farmers.

From afar, heaps and heaps of material can be spotted which like the sand dunes of the Kalahari Desert, have become a land mark to the once desolate place.

The new 'face' of Medie is quickly taking shape. There are noticeable new modern houses painted different bright colours.

Trucks carrying loads of coal are now a common sight. It is clear the mine has transformed the village in a short space of time.

During a media tour of mining operations recently, company CEO Mr Morne du Plessis told journalists that Minergy Limited had hit the ground running and that production was in full swing.

The CEO expressed happiness with progress made since the acquisition of a mining license a year ago noting that the plant had successfully passed both electricity connectivity and leak tests and was now fully operational.

In addition, plant upgrades were ongoing to improve efficiencies, he said.

Coal exports to specific industries in Namibia and South Africa for trial started three weeks back.

"As soon as they are happy with the qualities which we have already given them, we shall then have offtake agreements." he stated.

Mr du Plessis however said the quality of the coal was 'fantastic' explaining that the mine produced three types including fine product, which was good for the cement and lime industry. It is reportedly the least profitable, most profitable being the bigger fractions used by industries.

Minergy envisages a bright future in the coal industry and believes it is better positioned to take over the lucrative market since demand for the product is high owing to short supply of coal specifically in the South African market.

According to a company press release, this was confirmed at the recent Coal Industry Day held in Johannesburg last month.

"As a result, it is believed that Eskom will suffer a shortfall in coal supply of 470 million tons by 2030," stated Mr du Plessis.

He said big players such as Anglo American and South 32 were withdrawing from the coal sector and disposing of their assets which meant demand would increase.

Currently, the company is exploring various options for offtake ranging from longer-term agreements for the finer duff product to spot deals for bigger fractions.

Meanwhile the company's executive director, Mr Martin Bartle has said production was actually three months ahead of schedule.

He attributed the achievement to the opencast mining contractor Jarcon, who moved with speed to get things going noting that operators of high standards were available because mines had closed down in Botswana.

Mr Bartle said after engaging the mining contractor, the company immediately started getting out about 70 000 cubes per day with one excavator and three dumpers compared to the 40 000 to 50 000 cubes previously obtained.

Company marketing manager Ms Lynett Kruger said Minergy was trying to focus on the South African industrial market as well as those of other neighbouring countries.

She said in South Africa big players took up all the product in the local market which often resulted in industries having to struggle to get proper supply because they used bigger volumes.

"These industries need consistency and their boilers are set up for just that, consistency," she said.

Ms Kruger said although there were a lot of junior players in the South African market, they did not always have the correct quality and consistency and also failed to meet the required volumes.

"This is the market that we need to focus on," stated Ms Kruger adding that it included the food, paper, cement and sugar industries which still used coal.

The inconsistency and shortage of supply is really creating a lot of problems for these bigger industrial users and that is the market Minergy wants to target.

"Consistent and quality is of utmost importance to these bigger users and that is where we want to play in," she reiterated.

In addition, she said the cream of the coal in South Africa had been taken out over the last 40 to 50 years and as a result, the big players in that country were mining poorer qualities not suitable for use by industries.

The smaller Botswana market is also targeted and Minergy believes it will be able to provide competitive pricing.

To date, about 39 000 tons of coal has been extracted while some 340 000 tons, amounting to roughly three months of feedstock, are exposed in the pit and only need to be blasted and put through the plant.

The management envisages that beginning this month, the company will be mining 110 000 tons per month which should after being put through the washing plant, result in saleable coal of between 70 000 to 80 000 increasing to 100 000 tons per month next year.

The company says despite extremely difficult access to funding, it has successfully raised P90 million from the Botswana Development Corporation and Minerals Development Corporation of Botswana.

Management is confident that the funding is sufficient to bring the mine into full production.

Minergy Limited, a Botswana Stock Exchange listed company, also owns 100 per cent of the 390 million tonne Masama Coal Project in the Mmamabula Coalfield.

Source : BOPA

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