Why SA investors think Gov lied about coal riches

Two South African geologists with experience in coal exploration- Peet Meyer and Xavier Prevost-have pulled the veil from Botswana government’s professed 200 billion tones of coal reserves and urged government to desist from exaggerating its find and misleading investors. Meyer of P.C Meyer Consulting Firm said government is aware that the claim is untrue and should invest in carrying out a proper research.

He puts Botswana coal estimates at a modest 33 billion tonnes and argues fiercely that economically mineable coal in Botswana is 0.5 meters thick within a rock plus a 20 percent geological loss. Meyer said the 212 billion tonnes consists of 48.6 billion tonnes of reserves and 164.3 billion tonnes of coal resources. “Within the 48.6 billion tonnes of reserves, the measured and proven mineable coal is 20 percent accurate within a 0.8 kilometers of spacing,” argued Meyer to gaping bureaucrats at GICC.

He continued: “About 2.4 kilometre of spacing contains unconfirmed reserves.” Meyer was presenting at the coal conference held last week. Further, Meyer said the 164 billion tonnes of resources are hypothetical and speculative because they are essentially undiscovered, thus leaving the country with about 33 billion tonnes of discovered coal reserves. His claim brings into question government’s ambitious drive to diversify to coal away from diamonds. Meyer’s claim also comes a year after government launched an ambitious Coal Roadmap Pitso, which argues that all known Botswana coal deposits occur in the Karoo Super-Group and covers about 70 percent of the country.

Permanent Secretary at the Ministry of Minerals Energy and Water Resources Boikobo Paya was quoted in 2012 as saying that Karoo reserves are exploitable. Reached on Wednesday, Paya referred Botswana Guardian to the Department of Geological Survey. Meyer elaborated further that coal juniors in Botswana have sizeable billions of tonnes in proven reserves. He said African Energy has a license for coal resources totalling 2.4 billion tonnes, while Aviva Corporation area has 1.3 billion tonnes. Asenjo Energy has about 4 billion tonnes, Continental Coal has 9.2bn tonnes, Debswana’s Morupule Coal has 2.3 billion tonnes, Hodges Resources has 4 billion tonnes, Jindal – the miners of Mmamabula Energy Project have 2.3 billion tonnes. Nimrodel Resources and Shumba have 6.8 billion tonnes and 1 billion tonne respectively.

This adds to 33.3 billion tonnes. “People who calculated this coal reserves were wrong. Firstly the calculations are the same as those that were done as far back as the 1980s, but now ask yourself how much coal has been mined since then and how much has depleted?” His colleague, Prevost, a geologist and consultant at XMP Consulting challenged government to publicise the Coal Roadmap document, saying it was misleading for government to preach a roadmap whilst it remains incomplete and intangible, which proves that the research has never been done to determine the coal reserves. “Botswana should group all professional and qualified geologists to identify their coal and help with the coal roadmap because it is evident that there is serious lack of knowledge,” Prevost said. In 2012, Paya said the initiative was intended to formulate a Strategic Roadmap for the development of Botswana coal and coalbed methane resources. The Roadmap is executed into three phases with phase one focusing on literature review and planning. The second phase, Paya said focuses on technical studies, resource assessment and evaluation and is behind the March 2013 deadline. Phase three was to focus on Techno­Economic Evaluation; development options evaluation and Selection, which are scheduled for completion in 2014.