Workers laying
down core at the
Mmamantswe project
in Botswana
 
Perth, Australia — ESI-AFRICA.COM — 19 November 2010 – Australian resource development company Aviva Corporation has abandoned plans to develop a 1 000MW coal-fired power station in Botswana, which had banked on concluding a power purchase agreement with South Africa.

In an address to shareholders at the group’s annual general meeting here, chairperson Antonio Iannello said the decision had been based on South Africa’s draft Integrated Resource Plan (IRP2) released in October, which did not provide for any independent coal-fired power until 2027. “A position which we believe is not sustainable,” the group said.

The plant would have been situated at the Mmamantswe coal project, a joint venture between Aviva and Mawana Minerals of Botswana. In a project fact sheet drawn up as recently as August, the group said Mmamantswe had a large coal resource of 1.3 billion tonnes, including a probable run of mine reserve of 895Mt.

“Aviva is proposing a 10Mtpa coal mine, to support a 1 000MW integrated power station with potential for expansion into export sales. The project is well placed for development when South Africa has completed its power procurement planning,” read the fact sheet.

Aviva had progressed resource development studies at Mmamantswe on the mine, including exploration, resource definition, coal preparation and mining studies, and preliminary environmental approvals.

In a quarterly update to end-September “’ issued after the draft version of IRP2 was released “’ Aviva said the negative sentiment towards private coal fired power made it very unlikely that the group would proceed with its plans.

“The board of Aviva had already elected to write off its investment in the Mmamantswe project, based on the continued uncertainty in respect of the time of the release and promulgation of the IRP2.”

According to the IRP2 document, the tender process for the supply of coal-based power would take place from 2017 to 2018. The chosen suppliers would be given from 2019 to 2026 to do their business case development, their environmental impact assessment, and to complete construction.

CIC Holdings, which is also planning a 1 200MW coal-fired energy plant at its Mmamabula project in Botswana, said it would make a decision on the future of the project once the IRP2 was finalised. “We won’t be making any decision until IRP2 is in its final form,” said spokesperson Erica Telling.

Public hearings on the IRP2 are scheduled to start in Durban on 26 November.