Kibo Mining has announced an agreement to acquire an 85% interest in the Mabesekwa coal to power project in Botswana from Sechaba Natural Resources, a 100% subsidiary of Shumba Energy. In a 30 November press release, AIM- and Johannesburg Stock Exchange-listed Kibo announced that Sechaba will receive a 28% shareholding in Kibo alongside retaining a 15% shareholding in a new special purpose vehicle to be incorporated for ownership of the Mabesekwa independent power project.
Kibo, which is developing a similar integrated coal-to-power project at Mbeya in Tanzania, said it aims to re-position itself as a strategic regional electricity supplier. “This is a fantastic opportunity for Kibo as we focus on building an energy business with producing assets in multiple geographies,” said chief executive Louis Coetzee. “The synergies with our flagship [Mbeya Coal-to-Power Project] MCPP project in Tanzania are impossible to ignore, placing us in a strong position to utilise our knowledge and contacts to rapidly advance both projects to production in a short time-frame.”
The Mabesekwa project will involve the construction of a mine-mouth power plant and the development of 300m tonnes of the 777m-tonne coal resource defined by Shumba. The project has already secured water and land use permits and environmental certification. It may also include the incorporation of a solar component. As per the agreement, Sechaba will retain royalties should the project go into production, including 50¢/tonne sold and 0.225¢/kWh sold. The transaction will also give Kibo first right of refusal to participate in Shumba’s projects over the next six years, with reciprocal rights for Shumba on Kibo coal export projects.
In 2015, Sechaba signed heads of agreement with South Africa’s Mulilo Renewable Project Developments for joint development of the Mabesekwa project for its inclusion in the South African Coal Baseload IPP Programme, which was expected in 2015. The project initially involved construction of a 2x150MW coal plant to be located 5-6km from the mine mouth fed by conveyor belt with coal purchased from Mabesekwa Colliery Limited. Shumba Coal managing director Mashale Phumaphi told African Energy that the partnership with Mulilo ended in 2016.
