By Oscar Habeenzu | for Moakanyi Magazine
Botswana is posed to be one of the biggest exporters of energy in South Africa, supplying not only its local households, but of fifteen other countries; Shumba Energy is at the frontier of this agenda in Botswana.
As a rising lion in the Savannah, Shumba Energy is shaping to be the Lion King of Energy in Africa, as it holds a diverse portfolio not only in exploration, but in project development, as they believe and act on “powering the future”.
Shumba Energy is a business and vision to celebrate.
Mashale Phumaphi, Managing Director of Shumba Energy, speaking recently to Mining MX said, “there is a huge market in Botswana and regionally and the economics cannot be ignored”, and Shumba can no longer be ignored as an energy giant in Botswana, and Southern Africa.
Shumba Energy is a Botswana based, locally owned coal and energy development company listed on the Botswana Stock Exchange (BSE) and the Stock Exchange of Mauritius (SEM). The company offers the advantage of being based in a country with the best credit rating in sub-Saharan Africa with a stable fiscal and political setting.
Established in 2011, the company is reaching its development objectives and now controls a significant portion of advanced energy projects in Botswana, including over 4.5 billion tonnes of coal for thermal energy and exports. As a major industry player, Shumba Energy is reaching its development objectives and the company is on a short-term mission to advance into production to create cash-flow and return to their shareholders.
The current power deficits of Botswana and its neighbours stand at Botswana 600MW, Namibia 600MW, Zambia 1,500MW, Zimbabwe 950MW, and South Africa 21,000MW, all indicating a bright future for Shumba Energy, that is poised to reduce the deficit in the near future.
Shumba Energy aims to satisfy the growing coal and energy demand in the SADC region as a result of chronic power shortages. This is our long-term mission as Shumba Energy, “Powering the Future” means addressing chronic shortages head-on and supplying energy to affected Southern African countries in a sustainable and cost-effective manner.
Shumba Energy’s flagship projects include the Morupule South Mine (MSM) Project, Mabesekwa Independent Power Producer (MEIPP), Sechaba Coal Independent Power Producer (SCIPP), Solar Energy Project, and the Lethlakeng Underground Coal Gasification Project.
Shumba Energy made headlines in August 2019, as it entered into a lucrative joint venture, creating a new venture, and driving its operations – Coal and Petroleum Limited. Mining MX reported that “SHUMBA Energy, the Botswana-listed firm, has signed an agreement with two Chinese companies that could lead to the develop of a $1bn coal-to-liquids plant (CTL) using coal from its Mabesekwa prospect in Botswana. Shumba formed a joint venture Coal Petroleum (CoPet) in which it will have an 80% stake. CoPet is to develop Project Tsosoloso which is targeting production of petroleum using coal supplied from its one billion tonne Mabesekwa prospect. CoPet is partnered with Powerchina International Group and Wison Group which will bring the CTL technology to bear in a bankable feasibility study. Phumaphi said it was possible CoPet could be listed in the UK in order to access capital to fund its equity contribution to Project Tsosoloso”.
The Project Tsosoloso encompasses the development of a Coal to Liquid (CTL) facility to provide a local supply of ultra-low sulphur diesel, high octane gasoline, fertiliser, commodity chemicals, and electrical power.
The Morupule South Mine (MSM) Project, a 1.5 million-tonne-a-year operation, is located 10-15km South of Botswana’s only operating coal mine and perfectly positioned to road and railway infrastructure, the MSM will produce export quality coal for local and regional industrial users. Shumba has formed a partnership with a leading independent global trading house for the marketing of all export product. This collaboration will deliver advantage of scale and combined expertise with marketing and logistics expertise in the global and local coal markets.
The project has over 1.2 billion tonnes amenable to open cast mining with 83% of the resources coming from the Morupule main seam. Study results confirm robust economics across all Morupule South development scenarios. Benchmarked against other southern African domestic mines, Morupule South’s mining costs and coal quality is predicted to be one of the lowest costs in the region.
The 600MW Mabesekwa Independent Power Producer (MEIPP) will be developed as an integrated mine and power station. The MEIPP project is being developed to supply electricity to South Africa under the South African Coal Baseload IPP Programme for Cross-Border Projects. As a parallel bid submission, the project is also shortlisted in the Government of Botswana Greenfield Coal Baseload IPP Programme.
The project is a coal-based mine-mouth power plant at a 1 billion tonne coal resource. This is an advanced project with over 30 years of low-cost open-cast JORC-compliant reserves. The EIAs for both the mine and power station are complete and water allocation and surface rights are approved. Water supply has been secured from Shashe dam and will be piped along existing servitudes. A backup supply will be obtained from a nearby well field.
The Sechaba Coal Independent Power Producer (SCIPP), is a mine to 300 MW coal-fired power plant being developed to supply electricity to Botswana and other Southern African countries. It is located in the vicinity of the Morupule power station complex. Coal supply for the SCIPP will be provided by Shumba Energy through the company’s 1-billion-tonne Sechaba coal resource. The project is advanced with over 30 years of low-cost underground JORC-compliant reserves. An underground water source has been identified for the SCIPP and an EIA for mine supplying IPP completed.
The SCIPP power plant is envisaged to be configured as a 2 x 150MW (gross capacity) coal-fired power plant. The boiler furnace will be of the circulating fluidized bed subcritical natural circulation type. The estimated in situ coal resource is 1,144 Mt in accordance with JORC Code and there are two main coal seams. Average seam thicknesses are 2.6m (Taukome Bright) and 3.7m (Morupule Main) with the coal found at average depths of 30-100m, to be accessed by underground mining. The prefeasibility study conducted on the mine and plant including associated infrastructure was completed in July 2014.
For the Solar Energy Project, Shumba Energy has secured 1000ha of land in close proximity to transmission infrastructure and large energy consumers and is in the process of securing more land. The aim of the project is to build a scalable solar power plant in order to meet Botswana’s immediate electricity demands and for the region’s long-term consumption. The scoping phase of EIA for this project has been completed.
The Lethlakeng Underground Coal Gasification Project has significant coal resource portions over 200m in depth from the surface. The project is located in an area formerly drilled by Shell Coal during the 1970s, hence the stratigraphy and coal occurrences within the area have been determined from some 30 historical boreholes spaced some 7-10 km apart. The Lethlakeng Underground Coal Gasification Project has a licence covering 1000km2 and an exploration target of approximately 500 million tonnes of coal over 10% of the area. Shumba Energy aims to fast-track the development of this project with the assistance of a committed strategic partner.
If considering to invest by buying the Shumba share on the BSE, Shumba Energy says there are four reasons to invest in them – Jurisdiction, Exploration to Development, Management and Projects.
“In terms of investment opportunities in Africa, Botswana has the best credit rating in sub-Saharan Africa with a stable fiscal and political setting. Botswana is the highest ranked jurisdiction in Africa on policy factors in a survey of mining companies. Internationally, the country is ranked 14th out of a total of 109 countries. Shumba Energy has moved from being a leading African explorations company to a development company and now owns a significant portion of advanced energy projects in Botswana. Shumba’s Management consists of highly experienced individuals with extensive global knowledge of project development and financing. Project locations with excellent infrastructure access with up to 25 years+ ’take-or pay’ PPAs”, they wrote to their future partners in their website.
The Shumba Energy share is an investment for the future, one you buy and keep, and watch it grow over the years, as energy is a greenfield in all markets. The Shumba Group made a profit of US$5 million in 2018, a bulk from financial gain incomes as it raises funds for exploration and development of energy projects in Botswana.
Source: Shumba Energy, Wikipedia, MiningMX, CoPet
