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Minergy making strong progress on Masama project

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Botswana Stock Exchange (BSE)-listed coal mining company, Minergy Limited, yesterday (Tuesday) released its inaugural results for the year ended 30 June 2017, reporting a loss per share of 6,76 thebe. The company embarked on a capital-raising exercise in the first quarter of 2017, raising P70 million via a private placement prior to listing on the main board of the BSE in April this year. Minergy CEO, Andre Boje commented that, “A lot of work had been done and continues to be done since inception.

Our focus shifted to coal production for supply to the regional and export markets rather than coal for power generation. “We believe the narrative around South Africa requiring imported power will not come to fruition in the foreseeable future, if at all. This is supported by the announcement that there is a surplus of 9,000 MW capacity and that South Africa has signed off-take agreements with Botswana and other SADC countries.” The demand for coal in the southern African region continues unabated with prices escalating on an ongoing basis.

The July 2017 McCloskey Coal Report highlights that South African domestic prices were 51 percent higher than the same period in 2016 and that there is strong demand from the cement, industrial and paper industries. Boje said this situation is driven by demand exceeding supply as producers are focused on fulfilling their take or pay export agreements together with the lack of investment in new projects or expansion of existing production facilities.

“The climate of under-investment in South Africa is blamed partly on political interference in the mining sector and the rise of resource nationalisation,” he explains. Initial production at Masama is earmarked to be 1.2 million tonnes of saleable coal per annum ramping up when required, as the project will have a capacity to process 3 million tonnes of run-of-mine coal per annum from first commissioning.

Whilst the initial project plan focused entirely on the 1.2 million tonnes to the regional market, Boje emphasises that attention must be paid to the export market as the API4 index price for seaborne thermal coal has risen 67 percent since 2016 and currently trades at $82.00 to $84.00 per tonne. In addition to the projections, he said “the international traders forecast that this trend could continue, albeit at slower rate, due to production cutbacks in China and delayed investment in Greenfield coal projects.

“Noteworthy is significant investment by large multinationals in coal projects in Australia which highlights their bullish view on coal going forward.”Boje added that Botswana has a significant role to play in the seaborne thermal coal market due to its large untapped coal resources and proximity to the South African coal export infrastructure. Meanwhile, it is understood that various requirements and obligations relating to the submission of a mining licence application are also being attended to, with the target date for submission being the end of September 2017.

The company has engaged extensively with the various government departments and the response has been most encouraging. It is believed that the licence will be granted by the second quarter of 2018.Requests for information (RFI) have been issued to identify qualified suppliers of the processing and wash plant and for mining contractor. This process is expected to be complete by the end of October 2017.

Talking about the industry, Boje said that renewable energy has a role to play, but it has been proven unreliable for base lzoad electricity supply with the only alternatives being nuclear, hydro and coal. This is the first year that the group expensed certain operating expenditures, which were mostly incurred at the holding company level, which acts as an investment and holding company and sources funding for the group. Cash utilised in operations amounted to a loss of P9,4million with Exploration and Evaluation Asset Expenditure also showing a loss of P5,6 million.

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Engen profit goes up

Koobonye Ramokopelwa

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Engen Botswana, the only listed petroleum company is expecting better results for the six months to June 2018 as a result of favourable trading environment. For the six months period to June 2017, the company made a profit of P55,2 million.

Engen, which supplies petroleum products to retail and institutional clients said, compared to the same period in 2017, profits will be higher on the backdrop of rising international crude oil prices. According to available data, oil prices jumped by 20 percent in the first six months of the year to close at $73 per barrel. Yesterday (Tuesday), oil prices were hovering at $77 per barrel.

The firm, like its peers has also been bolstered by government decision to hike petroleum prices in May. Petrol went up by 23 thebe, 45 thebe for diesel and 38 thebe for paraffin, all per litre. Eric Molale, the minister responsible for petroleum products in the country did not rule out any price increase in the foreseeable future on the backdrop of rising international oil prices.

Local users of petroleum products are not even saved by the fact that the National Petroleum Fund-which cushions customers against increasing oil prices, is fast running dry due to alleged misappropriation by those tasked with maintaining it (the Fund).

Meanwhile, Engen which is headed by Chimweta Moonga has told its shareholders that results will be out before this month ends. “Therefore shareholders are advised to exercise caution when trading in the group securities until such time as a detailed announcement is made,” said a statement from the BSE listed firm.

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Graduates urged to be innovative

Keikantse Lesemela

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Botswana Institute of Chartered Accountants (BICA) President, Verily Molatedi has urged graduates to look beyond job seeking and come up with creative and innovative ways to create employment and contribute to economic development.

This Monday, over 400 students graduated from Imperial School of Business and Science (ISBS) from different fields including business management, Association of Accounting Technicians (AAT), finance and banking, human resource management, tourism and hospitality management and advertising. The ceremony was the first batch of students who completed degree programmes in ISBS.

Speaking during the graduation ceremony, Molatedi said the 21st century is awash with many opportunities and challenges but it is only the optimistic that can rise above and turn challenges into opportunities. “I therefore urge all graduates to acknowledge and take advantage of the government efforts in providing facilities beyond tertiary education and contribute towards economic diversification. To this end some of you may have to be entrepreneurs,” said Molatedi.

Molatedi explained that with over 10 000 graduates annually produced in tertiary institutions, graduates must continually build their skills and think innovatively and create their own brands as this will increase their chances of employability globally.

“Employability is about making sure that you diversify your skills, get knowledge for the industry. It is the key to realizing our economic diversification agenda, and hinges on your availability to be enablers in the country’s present and future economy,” said Molatedi.

Imperial School of Business and Science Director, Nidheesh Sharma said graduates have unique professional identity and a set of values and beliefs that will allow them to continue their quest for lifelong learning and distinguish themselves in their chosen paths as the faculties offered are globally recognized.

“Previously we have had many students completing certificates and diploma programmes but this is the first batch to have completed degree programmes. Graduating annually, young professionals were imparted with the knowledge and skills that are required by the regional and global job market,” said Sharma.

Sharma highlighted that ISBS started in 2003 as a BOTA registered institute and in 2011 it registered with Tertiary Education Council (TEC) and started offering Diploma and Advanced Diploma Programmes. “In 2013, the school re-branded from its old name to current name, ISBS. In 2015, ISBS was awarded best upcoming Institution by HRDC and in 2018 HRDC put us in the top three of Private Colleges,” he said.

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