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Wednesday, July 5, 2017
Tlou Energy submitted an application for a mining license for the Lesedi CBM project to Botswana’s Department of Mines in the Ministry of Mineral Resources, Green Technology and Energy Security. In Botswana, holders of prospecting licenses are issued mining licenses once exploration on a relevant prospecting license has been concluded and the holder of the prospecting license is ready to commence commercial production.
Mining licenses are assessed in accordance with the prescribed statutory requirements of the Botswana Mines and Minerals Act. Two major components of a mining license application are an approved EIA (granted for the Lesedi Project in September 2016) and a feasibility study for the relevant project, which for the Lesedi includes a CBM-to-Power project.
Tlou’s Managing Director Tony Gilby said: “The Mining License for the Lesedi CBM Project is the first application of its kind to be lodged in Botswana. The award of the Mining License will be another milestone for the company which further enhances the first mover advantage we have to develop a Gas-to-Power project in the country. The issue of a Mining License will pioneer the development of a new and exciting natural CBM gas industry in Botswana, an industry that will lead to a new indigenous source of energy and employment for the country. Over time it will potentially allow new manufacturing industries to develop using Botswana CBM gas and facilitate the creation of a new renewable energy industry. This is due to gas being a relatively clean and cost-effective way to provide peaking power to complement the often-intermittent nature of renewable energy. I would like to thank the team at Tlou and our consultants for putting together such a comprehensive application and look forward to the Ministry’s assessment of the application in due course.”
Some of the benefits of a prospecting license being converted into a mining license include Tlou extending its tenure on the Lesedi, a prospecting license is for two to three years, while a mining license has a longer tenure (20 plus years). Under a mining license the holder has the legal right to sell the resource for which the license has been granted. The granting of a mining license is therefore a pre-requisite to commercializing a gas resource.
In January Tlou received a Request for Proposal (RFP) from the government of Botswana for the development of up to 100 MW of power using CBM. Tlou has received confirmation from the Ministry that they intend on issuing an addendum to the RFP for the development of up to 100 MW of CBM-to-power and a new closing date will be advised in due course.
The RFP, which will include a power purchase agreement, will assist in the development of a CBM gas industry in the country and create a new market for Tlou’s independently-certified gas reserves and significant contingent gas resources of ~3.2 Tcf (3C). The RFP requires details of the proposed field development, the installation of power generation facilities and supply of power into the grid in Botswana.
The RFP originally outlined that a number of supporting documents would be released to bidders at a later date and that the closing date for submissions would be 12 July 2017. As some of the supporting documentation has not yet been released, the Ministry has indicated that they will allow further time beyond the original closing date for submissions to be completed. The Ministry has not yet confirmed a new closing date.
The company has completed a significant portion of the work required based on the documentation received to date and will aim to get the proposal submitted as soon as possible once the supporting documents are received.
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