JOHANNESBURG (miningweekly.com) – Coal and energy company Minergy said on Monday that it will list on the Botswana Stock Exchange in the first half of this year and is also planning a Johannesburg Stock Exchange listing in 2017’s latter half.

In the initial capital raising ahead of the listing of its Masama coal project, Minergy, headed by CEO Andre Boje, raised P70-million in a private placement with selected investors.

A further placement is planned for March 2017 as part of the Botswana listing process, with total project investment expected to be about P200-million.

Initially, Masama will focus on targeting coal supply into Botswana as well as regional industrial customers and independent power producers (IPPs).

Located in the south-western corner of Botswana’s Mmamabula coalfield, the coal project is close to existing rail, road and water infrastructure, with distance advantages over competing suppliers to regional customers.

With 337-million tonnes of coal covering 120 km², the resource is said to have much to offer Southern Africa, being closer to South African coal consumers than some South African coalfields, and arising at a time Transnet Freight Rail sees Botswana as a potential provider of additional rail traffic on its coal line.

“As many primary producers of coal in the region turn their attention to the buoyant export markets, it leaves a gap for smaller producers to exploit,” Boje said in a release to Creamer Media’s Mining Weekly Online.

The resource’s large size also presents eventual export coal opportunities to traders who supply India, Asia, China and Europe, should international coal pricing remain at current levels.

A number of traders have already reportedly engaged Minergy on offtake agreements and project funding, but this is regarded as being premature at this stage by Boje, the founder and former CEO of Wescoal, who has many years of experience in the coal mining and trading industry.

He believes coal will remain the dominant energy resource for the foreseeable future, and foresees a future in which conventional coal-fired power providers will work with renewable-energy power providers.

Seaborne thermal coal is now trading at more than $80/t, up from $49/t a year ago, which bodes well for continued strength in international and regional pricing.

Minergy's cost advantage is based on shallow, opencastable coal seams with low strip ratios that more than make up for any logistics disadvantages it may have. The equity capital is being raised to bring the resource into production.

Environmental-impact assessments, feasibility studies and mining licence approval are expected to be in place by the first quarter of 2018.

Dividends are expected from the 2020 financial year onwards, provided it is a prudent strategy in terms of cash generated and that production begins in 2018 as planned.

Local Botswanan managers and board members have been appointed, with the Botswana listing providing locals with an additional direct investment option.