Partnering with Botswana could help unlock Waterberg coal opportunities

Logistical challenges and
market conditions may
have been the biggest
obstacles to unlocking the
opportunities in the Waterberg to
date, but developing the coalfields
in conjunction with Botswana
could make all the difference.
This is according to Mxolisi
Mgojo, CEO designate of Exxaro
Resources, who says stakeholders
should be recommitting to the
project.
“Exxaro has been on a journey
to unlock the Waterberg for the
past ten years. Much has been
achieved, but there is still a lot to
be done,” he said. “The accelerated
momentum achieved around
this project has slightly stalled
due to the market conditions,
investment uncertainty and the
challenges around the project such
as logistics. “
But, he said, Exxaro as the
largest investor in the project
remained committed to
re-energising the efforts and
engaging with all the relevant
stakeholders. “That has to include
Botswana,” he said. “We have to
unlock the region as a whole.”
He said the company currently
had extensive operations in the
Waterberg and a strategy was in
place to increase its investment in
the region.
“Much has
been written
about the
Waterberg and
its critical role
in the future of
coal for South
Africa and the
region. We
have extracted value out of this
coal deposit over the years and
it is imperative that we continue
to do so,” said Mgojo. “More
than 50% of South Africa’s coal
reserves reside in the Waterberg.
It is a source of growth for the
country and the region – a fact
that is explicitly realised by
the government in its detailed
references to the Waterberg in the
National Development Plan as well
as through the strategic integrated
projects (Sips). Sip 1 focuses
specifically on the Waterberg.”
To this end, said Mgojo, they
had prepared and transported over
200 000 tons of coal to Majuba
power station in Mpumalanga
to enable Eskom to determine
and test if the Waterberg’s coal
could burn in the region’s power
stations.
“We believe this can be further
developed as Eskom seeks
sustainable supplies to its power
stations now and into the future.”
Mgojo said they were also
confident that the coal would see
exports increase to such an extent
that Exxaro was
making further
investments in
expanding its
reach through
the Port of
Richards Bay.
“Most of the
initial challenges experienced were
around logistics infrastructure. In
this regard the rail infrastructure
capacity challenge in particular
has been addressed and the
constraints now lie more in
Transnet Freight Rail delivering
an efficient and predictable
service.”
He said through Sip 1 – the
most successful of the Sips in his
opinion – the commitment from
government to developing and
unlocking the Waterberg was
clear.
“All the stakeholders, however,
need to recommit to the project.
It is critical that Botswana is one
of these stakeholders. We need to
unlock the region as a whole,” he
said.
According to Mgojo the
combined volumes of South
Africa and Botswana make the
project far more viable in light
of the huge
infrastructure
spend that is
required.
More rail
and road
infrastructure
will be required
as well as
creating capacity
at the Port of
Richards Bay to
handle increased
volumes
efficiently in the
long run, he said.
“Investing in rail infrastructure
and providing the necessary
capacity for domestic and export
supply continues to take place.
The Waterberg and Botswana
could produce and transport 110
million tons of coal per annum.”
He said plans to deliver on
this vision had to be adapted
when commodity prices fell and
volumes were revised. Logistical
infrastructure would, however,
still be required to deliver on
these new figures.
“Logistical infrastrucutre is
crucial to the development of this
region. To be able to transport
coal – current and future – is a
critical element of the success
of this project. We are engaging
with TFR in this regard and the
focus is on delivery. We have
to ramp up
capacity.”
Installed
infrastructure
capacity in the
Waterberg is
currently still
6.6 million tons
per annum, said
Mgojo. “But TFR
has committed
to upgrading
the north west
rail and making
operational
improvements
to its rolling stock. This will
meet the needs for the immediate
future.”
He said the vision for the
Waterberg had long ago been
realised and the strategy was
ready to go. “Collaboration,
financial commitment and
a shared value will see it
implemented, allowing the
Waterberg to bring benefits for
South Africa and Botswana.”
INSERT
More than 50% of South Africa’s coal
reserves reside in the Waterberg.
INSERT & CAPTION
More rail and road
infrastructure will be
required as well as
creating capacity at the
Port of Richards Bay to
handle increased volumes.
– Mxolisi Mgojo
CAPTION
On the back of expected export growth, Exxaro is
expanding its reach through the Port of Richards Bay.