Shumba’s Morupule South coal project stalls

Shumba Energy’s Chairman, Alan Clegg.

Shumba Energy has slowed down intentions to develop its Morupule South coal asset, the company’s latest annual report has revealed.

Despite previously reporting negotiations with a number of parties for the development of at least three sub- sections of the Morupule South Coal asset, steps forward have been held up. “These were all stalled to the end of the reporting period with no progress,” said Shumba Energy’s Chairman, Alan Clegg.

Shumba has continued developmentally with its sub- division processes and completion of necessary ESG requirements for the eventual progressing of development deals with the third parties mentioned.

He said the parties are involved in securing reductant and thermal fuel resources in- situ as future source of supply for infrastructure related support industries as well for provision of industrial heating energy.

Morupule South has a resource of 2.45 billion tonnes of JORC compliant resources of which 380 million tonnes are in the measured and indicated categories. The BSE listed company remains resilient despite the stalled progress on its Morupule South coal project and other challenges that affected the company during the year ended 30 June 2020.

“We look forward to a 2021 financial year of both recovery post pandemic and continued real value growth that we strive for, that is to be realised in the share value as the delivery of operational revenue growth projects are realized. Our strategy is executed unwaveringly and communicated broadly to you our shareholders and prospective investors alike,” said Clegg.

He emphasized that Africa still remains most important, as the SADC market is still growing deficits that will continue to force upward local price pressure. “We continue to focus on developing our coal trading business and have established a track record of sustainable supply to our anchor customer, Lonrho, through established long- term offtake agreement,” said Clegg, adding that growing from Africa into industrial markets will remain a point of focus.

“We retain our intent to future export onto world seaborne spot markets in the longer term, but again this continues to depend largely on the logistical infrastructure establishment and transport costs. “The SADC regional governments and parastatal Transnet in South Africa and international development investment from the Chinese remain on track to deliver new infrastructure rail transport links,” he said.

Meanwhile, Shumba Energy has reiterated plans to build a coal to liquids ( CTL) facility, as the company continues its integrated energy development, despite the COVID- 19 challenges. Clegg said the company has cemented relations with Chinese companies - Power China and WISON Group for the development of CTL project.“Botswana has the largest un- tapped coal resources on the continent and upon which Shumba continues to expand its influence with the continued advancement of its coal- based CTL processes and investigation of other uses towards achievement of its socio- economic contribution goals aligned with the government strategy,” said Clegg.

The government strategy is development of Botswana Coal Resources Development ( CRD), an initiative expected to remain a key driver for both industrialisation and future sustainability on the local economy.