The Botswana governments through its oil company seem to be moving ahead to monetize the country’s vast coal resources as they seek to engage the services of companies to undertake the establishment of a coal to liquids facility in Botswana.
In a tender notice, state-owned Botswana Oil Company (BOL) said together with the Ministry of Mineral Resources, Green Technology and Energy Security (MMGE), through the Department of Energy (DoE) they are seeking prospective private companies and or parastatal bidders to undertake a bankable feasibility study, design, finance, construct, own, operate and maintain a coal to liquids plant in Botswana as a private sector led initiative with support from BOL.
“The project aims to diversify Botswana’s economy and attain fuel self-sufficiency through the exploitation of the country’s abundant coal resources,” said Willie Mokgatlhe headed parastatal.
According to BOL, the objective of the pre-qualification is to assess and identify organisations’ (including joint ventures, consortiums, etc.) bidders who can undertake a bankable feasibility study, design, finance, construct, own, operate and maintain a coal to liquids plant in Botswana to be facilitated by BOL.
A non-refundable deposit of P1100.00 payable to the BOL account is required prior to being furnished with a pre-qualification document which outlines the modalities of the pre-qualification.
BOL estimates that thousands of jobs can be created if the country were to convert its large quantities of coal reserves it has into liquids and in the process help diversify the economy. Chief executive officer, Willie Mokgatlhe told the inaugural Mining Investment Botswana that the 212 billion coal under the ground can be turned into opportunities that can create 15, 000 jobs when the coal to liquid plant is being built and 4, 000 permanent jobs when it becomes operational.
“This is a sizeable number of jobs. If you have a plant like this, you will immediately replace some of the jobs you have lost in the mining industry,” Mokgatlhe said, adding that the country can also be able to export liquids products and have an import substitution of $1.2 billion.
BOL feels that although such projects are capital intensive, Botswana will not only be a consumer but exporter of liquids products to the region where South Africa imports most of its requirements. “It also gives us the opportunity to diversify the economy,” he said. Equally, the vast coal resources will make the country a major energy player in the region. South Africa alone imports between 150, 000 to 180, 000 barrels per day of liquids fuels, which in itself presents a market for Botswana.
However, Mokgatlhe admits the project comes with its own challenges including the fact that Botswana will have to compete with trail blazers like Sasol, the South Africa’s international integrated chemicals and energy company. “Sasol plays a major role in this space,” he admitted.
Sasol said on its website that through its proprietary technologies and processes the main products it produces are: fuel components, chemical components and co-products. From these main products and further value-adding processes it delivers diesel, petrol (gasoline), naphtha, kerosene (jet fuel), liquid petroleum gas (LPG), olefins, alcohols, polymers, solvents, surfactants, comonomers, ammonia, methanol, crude tar acids, sulphur, illuminating paraffin, bitumen and fuel oil.
According to Mokgatlhe, Mozambique also has a lot of gas and they are looking into gas to liquids and their plant would supply more than the country’s demand.
Equally, converting coal to liquids is a capital intensive undertaking that will make government think twice especially at a time when treasury is experiencing declining revenues from mining and other sources.
“It is capital intensive (and) there is huge start up costs,” he revealed. It is estimated that a gas to liquids plat could cost over $3 billion and additional $1billion for a coal to liquid plant as gas is less expensive. The project can also face environmental concerns, but Mokgatlhe said modern technology can be used to mitigate against such and reduce the impact.