The coal-to-liquids project is part of the government’s Coal Roadmap strategy, developed to leverage the country’s huge coal resources
With Botswana’s coal reserves estimated to be in excess of 200 billion tons, Botswana Oil (BOL) is looking to monetize the black rock through coal-to-liquids.
The project is part of the government’s Coal Roadmap strategy, developed to leverage the country’s huge coal resources, which in Southern Africa are second only to South Africa.
Addressing the media at a recent pricing workshop organised by his organisation, Botswana Oil Acting Chief Operations Officer (COO), Mosetlho Kenamile explained these considerable reserves could be used to make Botswana self-sufficient in petroleum products.
“We see this project as a national revenue earner that could be an import substitute as well as an economic multiplier,” stated Kenamile.
He stressed that if the initiative is executed well, it could bring several benefits along its value-chain.
“Sasol currently is one of the biggest chemical companies in the world. It was set up to produce fuel from coal and in the process they are able to produce a lot of chemicals as well,” he said.
Kenamile added that the project, which he said would be ‘a major engineering project by any standards’, would also promote investment in the requisite infrastructure.
“It is quite a complex project which needs a lot of investment of between US$2.5 million and US$4 million,” he stated, adding BOL recently completed the feasibility study, which has already been approved by government.
“BOL is now moving into the next step which is bankable feasibility and thereafter moves into construction,” he revealed.
Meanwhile, Kenamile told the media that in line with the national transformation agenda as well as citizen economic empowerment, BOL has developed a framework on how to impact local business in the fuel value chain.
“We are currently operating on the downstream. Even in the downstream we have our own value-chain because we source products from outside the country, which is transported here and stored at the primary storage facility and from there secondary storage,” highlighted Kenamile.
He explained that BOL’s framework on citizen economic empowerment has four pillars, being: procurement, capacity building, supplier development and enterprise development.
The acting COO said one of the biggest challenges that citizen companies face is access to storage, adding BOL often rents its storage facilities to some of them.
According to Kenamile, BOL sells fuel to everyone at the same price.
“Before BOL was formed, when a citizen wanted to provide fuel to say Gaborone City Council, they would have to buy from established fuel companies who would also be eying the same opportunity. That was already taking them out of competition. Another factor affecting citizen companies is working capital, petroleum products inherently are expensive with low margins,” he said.