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Botswana blues

A SOUTH African geologist has accused the Botswana government of basing the development of a major rail line on non-existent coal reserves.

Staff Reporter

The industry has strongly rejected the geologist’s claims, calling them outrageous and provocative.

However, at least one industry player believes that while the geologist’s methodology is flawed, the government figures are “over the top”

Peet Meyer, a geologist at PC Meyer consulting, presented his interpretation of the government’s key coal resources data at the recent Botswana Coal and Energy conference in Gaborone and shared his findings with ILN.

Meyer said the 1991 coal inventory calculated by James Chatupa for the Botswana Department of Geological Survey overinflated the country’s coal reserves because Chatupa “used his own initiative to calculate the tonnes” and did not base his inventory on a recognised code, such as JORC or SAMREC.

“He [Chatupa] quotes ‘reserves’ and ‘resources’, but within the wrong contexts of the codes of today,” Meyer said.

“His ‘reserves’ are actually resources based on actual data, while his ‘resources’ are speculative.”

Chatupa calculated 48.6Bt of reserves and 164.3Bt of resources and Meyer believes “the remaining 164Bt does not exist” because it is highly speculative.

In Chatupa’s report, he clarifies the methods that he uses are “recommended by the US Bureau of Mines” but Meyer maintains “many of his reserves were inferred from as far away as 10 kilometres from the last borehole” and the majority of his resources, to quote Chatupa, are “essentially undiscovered”

Meyer also argued that since the inventory was compiled more than 20 years ago, the country had not adjusted its data and continued to publish its reserves as 212 billion tonnes.

He calculated his own estimate of Botswana’s coal resources using reported data from the listed companies active in Botswana, and came to a total of 33.34bt.

Meyer then argued that only 29.7Mt of the 33.4Bt of resources would go on to be exported.

“Many of the projects will not get to mining because of the un-mineable depths and faulting,” he said.

“This is not told in public but the billion tonnes of resources are happily being reported.”

Meyer said companies active in Botswana had not done enough work to report saleable tonnes and, without accurate saleable tonne figures, the government should not proceed with its proposed rail line development.

A strategic meeting is being organised for this month between major stakeholders and the government of Botswana to discuss the best options for a rail export line. Transnet Freight Rail has confirmed it will be looking to link Botswana with South Africa’s Waterberg coalfields by 2020.

“The government is overdesigning a rail export system … they are banking on exports that will not happen,” Meyer said.

“The private companies base their information on what they have drilled but they are all in it for the share process and the higher the tonnes but they are doing damage to the government image and long term planning.

“Unfortunately no-one wants to put more money into their project because there is no guarantee of a rail for export and the government can’t plan for a rail because the companies are deceiving them on tonnes. It is a catch 22 situation.”

Coal miners are railing against Meyer’s claims.

Walkabout Resources – formerly Nimrodel Resources – is exploring in Botswana. In August 2012 it announced an upgraded JORC Inferred Resource of a 6.88 billion tonnes of raw coal and a washed resource of some 3.6 billion tonnes.

Managing director Allan Mulligan said the practice of only using firm definition codes to calculate the national resource for the sake of infrastructure development was semantic.

“It is disingenuous to ignore the rest of the endowment and make no assumption of its eventual inclusion into the national resource base,” Mulligan said.

“The presence of the infrastructure will transform the economic model and have the ultimate effect of converting endowment into reserve.”

Mulligan added that Meyer’s discounts were inaccurate and overconservative with some duplication of primary losses. He described Meyer’s use of the word “deceiving” as “incorrect and objectionable”

Hodges Resources also is exploring in Botswana.

Managing director Mark Major told ILN that he did not agree with Meyer’s methodology.

“This is very conservative and misleading, but the number of 212Bt which the government uses is [also] way over the top and very misleading,” he said.

“In my humble opinion there is more than enough coal in Botswana to warrant a major development, but it will be the quality coal basins with infrastructure such as the Morupule Basin that will see the development in the near term rather than the other more remote projects with lower coal quality.”

The Botswana Department of Geological Survey, the government department responsible for the management of the country’s geoscientific information, did not return phone calls from ILN.

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