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Mmamabula - 75% of power for Eskom
Greg Kinross
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Even though certain industry experts are indicating that, despite expansions and additional new project capacity, Eskom will never be able to meet the growing demand for power in SA for the next 20 years, the impact has no de-valuing effect on one of the biggest emerging energy projects. CIC Energy president, Greg Kinross (right), shares his vision for the company's Mmamabula Energy Project and its contribution to resolving the escalating energy deficit.
CIC Energy's Mmamabula Energy Project, situated in south-eastern Botswana's Mmamabula coalfields, is set to contribute a substantial amount of additional power capacity.
The first phase of the project includes a coal mine with a capacity of between 7.5mtpa and 9mtpa, and a 2100 to 2460 MW power plant - the capital cost of the project being about $9,5bn.
Coal production is anticipated to commence in 2011, and power generation in late 2012 or early 2013.
CIC Energy has also signed a Project Development Agreement with International Power plc regarding the development of the proposed Phase One power station and mine. Independent Power is an independent power generation company with interests in over 40 power stations around the world.
The two companies together have signed a Preliminary Agreement with Sumitomo - a Japan-based company - for it to potentially purchase a 20% stake in the first phase of the project.
It is expected that 75% of the power generated will be supplied to Eskom for SA consumption, and the remaining 25% will be supplied to the Botswana Power Corporation.
Phase Two of the project is envisaged as a replica of Phase One, doubling the project's capacity to between 4200 and 4920 MW.
Phase Two is expected to come online following the completion of Phase One.
Regarding Eskom's energy requirements following the conclusion of its additional capacity expansions, Kinross explains that the power capacity from Mmamabula Energy Project's Phase One and Two will satisfy about half of SA's expected energy deficit.
Between 2014 and 2016, Eskom will need about 6000MW of new power capacity, but from 2017, this will steadily climb to more than 16 000MW in 2020 - widening the gap between expected demand and supply.
Expanding the Mmamabula coal resource also remains a further possibility. With over 1800 holes, in excess of 160 800m, already drilled at the Mmamabula South and East coal prospecting licences, Kinross explains that the group should be able to "achieve a significant increase in resources by mid-2008".
The current NI 43-101 compliant coal resource estimate on CIC Energy's licences stands at about 2.3bnt (measured and indicated categories).
The Mmamabula Energy Project constitutes a portion of what is called the Mmamabula Energy Complex - which also consists of a Coal-To-Hydrocarbons (CTH) project and export coal opportunities for grade A steam coal.
The CTH project, whose feasibility study is set for completion in the second quarter of this year, is a coal gasification and petrochemicals plant, which is on target for commercial operation in 2013.
"The CTH project encompasses blue-chip technology, and is also expected to involve an equity partner at a later date," Kinross adds.
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