African Energy Resources joins a growing list of international resource companies as it prepares to list on the Botswana Stock Exchange following approval for the dual-listing.
The company will join the likes of Discovery Metals A‐Cap Resources and CIC Energy when it begins trading on the BSE later today. The move will place increased investor focus on its wholly owned Sese Coal Project, where the company continues to make rapid progress towards developing the 2.7 billion tonne project.
Importantly, Botswana is an emerging global coal province widely perceived as an excellent investment destination by mining companies.
The dual-listing provides African Energy with access to an additional shareholder base within Botswana that includes a number of significant institutional investors and pension funds. A formal ceremony will be held in Gaborone today to mark the admission of the company to the BSE.
The Sese Coal Project is supported by good infrastructure 25 kilometres to the east including road, rail and a 220 kilovolt power line.
India is considered the likely market for Sese thermal coal, with demand set to increase from 50 million tonnes per annum in 2010 to 210 million tonnes per annum by 2025. China is also experiencing a surge in demand for the resource with thermal coal imports expected to double to 213 million tonnes by 2025.
In September, African Energy Resources received results from a Concept Study that confirm the technical and commercial viability of the project.
Robust cash flows and strong operating margins are possible under a variety of scenarios that do not require new rail and port infrastructure.
The study concluded that the project could be developed through a staged approach. An initial, up to 1 million tonnes per annum operation can generate cash flows from 2013 and involves selling washed coal into domestic and regional markets.
Additional coal sales to a power station, and moderate volumes of export sales could expand Sese into a 3 million tonnes to 5 million tonnes per annum operation.