Botswana has been unable to exploit its coal reserves as the country cannot compete, in terms of delivery times and costs, with South African coal mines, which have superior access to ports, other infrastructure and finance. This is according to Gerrit van Rooyen, an economist at NKC African Economics. He says a further constraint is the fact that Botswana is a water-scarce country, which is a challenge for waterintensive coal mining. Most of the limited coal that is currently mined in Botswana goes towards the coal-fired Morupule power station – the country’s main source of locally generated electricity. According to Van Rooyen, the government is interested in diversifying the economy away from diamonds – because of Botswana’s heavy reliance on diamonds and the uncertain outlook for this commodity – and has identified coal exports as an alternative. To this end, the government has issued new coal-mining licences and is planning to improve the country’s coal beneficiation and railway capacities. The government also wants to reduce its dependence on energy imports by expanding or building new coal-fired power stations and exploiting local coal and coalbed methane reserves. He explains that the opportunity has arisen to export coal to South African power stations close to the Botswana-South Africa border, because of several South African coal mines that have been placed under business rescue. Botswana’s mines could now possibly deliver the coal to South African power stations at a lower price than a South African supplier, which would be of great help to South Africa’s beleaguered power utility, Eskom. Also, as a result of insufficient investment in new South African coal mines and a projected increase in African coal demand, new Botswana mines could seize the opportunity to steal some of South Africa’s share of coal exports to the rest of Africa. However, this would require entirely new railway lines to be developed into neighouring countries.