Shumba Energy Ltd has announced the signing of a binding Memorandum of Understanding (MoU) between the company’s subsidiary Shumba Coal Trading Ltd (SCT) and HMS Bergbau Africa (Pty) Ltd, a full subsidiary of German listed HMS Bergbau AG (HMS), a leading independent global trading house.
The Botswana Stock Exchange listed company was established in 2011 to provide SADC region with coal and energy. Shumba is reaching its development objectives and now owns a significant portion of advanced energy projects in Botswana, including over 2 billion tonnes of coal for thermal energy.
SCT was established in Mauritius specifically for the purposes of trading Coal from Shumba Energy Mines and/or other Botswana based Coal Mine operators wishing to enter the seaborne Coal export market.
Under the terms of the MoU, it is intended that HMS Bergbau shall be responsible for the exclusive marketing in respect of all export product produced at the mines expectedly as of 2019, estimated at over 2 billion tonnes of coal.
The collaboration of the parties will deliver advantage of scale and combined expertise. Shumba Energy’s know-how of development of coal mines in Botswana and its established trade structure with SCT combined with HMS Bergbau’s marketing and logistics expertise in the global coal markets, offers a solid base for further growth for both companies, and cements its position in Sub Saharan Africa.
Managing Director of Shumba Energy, Mashale Phumaphi said despite political pressure to support non-fossil based energy fuels, they believe that the realisation that in the SADC region there is little other option for sustainable base load energy generation combined with the global long-term outlook for thermal coal demand, and driven by the industrialisation of emerging economies the future for Thermal Coal based energy is very promising.
“The signed MoU, which introduces a credible and experienced partner, is a welcome step towards exploring the export market. We look forward to developing a long-lasting relationship with HMS Bergbau.”
Heinz Schernikau, founder and CEO of HMS Bergbau AG added that they are delighted to wrap up another exclusive marketing agreement in South Africa, which will result in a significant expansion of our operating activities in this region.
“Once again, our global marketing network and wealth of expertise in commodities logistics, as well as the group’s international standing as a reliable trading partner, proved its worth in the conclusion of this agreement. Besides expanding business volume in South Africa, we also expect positive effects and improvements in terms of our position on the international coal market.”
Shumba Energy’s primary focus however remains on developing power stations in Botswana to address the power challenges faced in southern Africa.