Home / Coal / Minergy Limited on drive to reduce debt, and boost output

Minergy Limited on drive to reduce debt, and boost output

Minergy Limited, Botswana’s only privately-owned coal miner, has revived plans to list its shares on the London Stock Exchange (LSE) to reduce debt and boost output amid a global commodities boom, according to its chief executive officer.

Minergy shelved plans for an initial public offering on London’s junior AIM stock market in 2018, as coal prices in the southern African market plummeted and Brexit uncertainty loomed.

“We are now considering listing on the London Stock Exchange Standard Market, not AIM, as we believe it is more cost-efficient and less administratively onerous,” Morné du Plessis told Reuters in response to emailed questions.

“(The) quantum depends on market appetite but we would utilise funding to fund doubling up capacity and settle expensive debt,” he added, without providing a timeline for the IPO.

Minergy’s Masama Coal Mine, which was commissioned in 2018, has a capacity to produce 1.2 million tonnes a year and the company plans to double output if it secures a contract to supply power utility Eskom in neighbouring South Africa.

Minergy was shortlisted in October 2020 to supply to Eskom’s Tutuka power station and a due diligence process is currently underway.

“We have been advised the process will be completed by February 2022 and based on the outcome a supply agreement may be entered into”, du Plessis said.

Apart from local clients, Minergy currently exports coal to South Africa and Namibia.

Botswana is estimated to hold coal reserves of about 212 billion tonnes, but the country has only two operating coal mines with the 390-million tonne Masama mine being the first privately-owned coal mine.

The other mine is the state-owned Morupule coal mine. Botswana is seeking to diversify its mining sector away from diamonds, the mainstay of its economy.

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