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Thursday, February 23, 2012

African Energy Resources uncovers 15000 tonne of coal for export trials

Thursday, 23 Feb 2012

Australian junior miner, African Energy Resources has mined and prepared 15,000 tonnes of coal at its Sese project near Francistown as a sample to test target export markets as the project nears commercial development.In a presentation made available, Mr Frazer Tabeart MD of AFR said the sample would also be used for bulk washing trials and to test key components such as the boiler.

However, it is the export trials that have sparked investor interest, being potentially the first time coal from Botswana will leave the continent and be tested in world markets, a development eagerly awaited by government and other coal sector investors.Perhaps more importantly, the export trial could potentially illuminate an export route for other coal sector players for whom the absence of a route from mine to port has paralyzed project development.

While AFR has not specifically said the coal sample will reach export markets via rail and port, the company's development plans include one million tonnes per annum through Zimbabwe and Mozambique to markets in India.According to its development plan, AFR plans to export up to one million tonnes per annum next year while producing another 600,000 tonnes for the domestic market from its thermal coal resources estimated at over 2.5 billion tonnes.

By 2014, the Australian miner expects Sese to be producing 4 million tonnes per annum, with up to 2 million tonnes targeted for export while the balance will be for a local power project and the local market. According to the plans, by 2017, with new rail infrastructure in place, Sese targets the production of 12.4 million tonne per annum with exports of 9.3 million tonnes, a figure that is expected to rise to 14 million tonne per annum by 2020.

Mr Tabeart at a conference last July said that "The challenge is infrastructure and we are taking a keen interest in this. We do not expect that a major railway line will be in place by 2017 and that’s something we have planned into our approach. We are starting with 1 million tonnes per annum and perhaps by 2014/15 we could partner with a local independent power producer and ramp up to five million tonne per annum. A much larger export operation is possible of even up to 30 million tonne per annum if the infrastructure for exports is put in place."


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