Shumba secures new coal supply contract

Shumba Energy has penned a three year coal supply contract which shall see the company supply over 20,000 tonnes of washed coal to a regional consumer who has not been named. According to the emerging coal explorer, the coal will be supplied trough the company’s coal trading division which was established two years ago. The deal will ensure sustainable revenue for the BSE quoted company, which recently listed in the main board.

“The execution of the medium term coal supply contract is in line with the company’s strategy of having a high proportion of contracted customers in addition to spot market customers. This approach will enable the company to generate predictable and sustainable revenues whilst not prohibiting its exposure to the upside of rising market prices for thermal coal,” said Mashale Phumaphi, Managing Director. Shumba Energy not disclosed the new client they will be supplying with coal. Last month, the company announced its coal division has made its first revenue.

Responding to Botswana guardian questions last month, Phumaphi said they are in the process of setting up coal wash plant which will come in handy for their coal business. “Having our own wash plant means that we can produce a larger range of products for the regional market and adjust to the market conditions as they change,” he said. ‘We intend to locate the wash plant in the Palapye area where we already have two projects containing over 3.5 billion tonnes of coal’Shumba energy was established in 2011 to provide the SADC region with low-cost coal and energy.

The company is reaching its development objectives and now controls a significant portion of advanced energy projects in Botswana, including over 4.5 billion tonnes of coal for thermal energy, said a statement.