M Mining Services (Pty) Ltd - Fossil Fuel Mining Services (Pty) Ltd} Botswanahasmillions...

AJ Carr Pr. EngMR Mohring Pr. Eng

12 March 2015

M3 Mining Services (Pty) Ltd

M3 Mining

In order to stimulate the economies of these countrieselectricity is required.} The one thing that they all have in common is that

they all have relatively untapped coal resources whichthey can use to generate electricity.

} All of these countries have unique characteristicswhich make them ideally placed to produce powerfrom coal mining ventures


} Mozambique has mines which focus on the supply of cokingcoal for the Steel market, associated with the coking coal is alarge proportion of low grade coal which would bestockpiled or returned to the pit. By having another use forthe coal, discard dumps would not be required and usefulelectricity could be generated for the country


} Botswana has millionsof tons of untappedresources which arenot being exploiteddue to the limited railinfrastructure to get itto ports andcustomers and makesprojects uneconomical


} Zambia is a landlockedcountry which needselectricity for its manycopper smelters. It hashistorical discard dumpswhich have the potential toproduce power while at thesame time preventingpollution associated withspontaneous combustionof stockpiled low gradecoal. This would make useof what has and wouldotherwise be left as waste.


M3 Mining

} Tanzania has a very lowlevel of electricityconsumption per capita,with only 18% of thecountry currently connectedto grid power. Thegovernment is promotingmineral exploration andmining in Tanzania whichrequires electricity. Thereare coalfields in the interiorof Tanzania with low qualitycoal perfect for electricitygeneration.


M3 Mining

} Energy is high on theagenda in Kenya asinsufficient electricitysupply adversely affectsbusiness in Kenya. TheKenyan coalfields arerelatively undeveloped butthere is a large coal miningarea near Mwingi, around150km east of the capitalNairobi.


M3 Mining

} Harnessing the energy of the wasteportion of coal production oruneconomic coal blocks to generateelectricity on site or at nearby industrialcentres.} Making use of combustion technologieswhich can use low quality fuel togenerate electricity, to supply othermines and industries in these countries


• coal resources in region;

• low cost establishment

Natural Gas Raw/Discard Coal

Mouth of mine power station

Site Embedded power station

• Limited gas suppliers;

• Expensive development

costs

M3 Mining


} Traditional Bubbling Bed Boilers◦ Some industrial units since late 70s i.e. Botswana Botash,

AEL Modderfontein◦ More recent projects: Mondi Merebank, Sappi Tugela Boiler

converted

} 2nd Generation Circulating Fluidised Bed Boilers ◦ Enhanced technology in terms of increased fuel flexibility


Some Fuel Flexibility but sizing limits

Lower parasitic load


Greater Fuel Flexibility

Increased tolerance of “fines”

Excellent Air Emissions Performance


} Coal mineralogy◦ Ash and residue compositions and properties can vary

dramatically i.e. erosion & corrosion concerns

◦ Different ash compositions and properties relative to Pulverised Fuel Combustion – lots to learn in Africa

} Local experience of CFB’s limited– Indian & Chinese have extensive experience

} e.g. Morupule B Chinese EPC supplied 600MWe CFB Stations: Major Availability challenges due to erection and operation issues



MWe Category Description

±16 Company, embedded

plant

Potentially some leniency when it comes to air emissions regulations, reduces

cost of abatement

±40 Decentralised, cluster/

complex plant

Could make most company-backedcomplexes independent of Power Grid

supply for baseload consumption.

±80 National/ Regional grid

plant

A reasonable minimum size for National/ Regional Procurement Programmes

} Viable 15-20 year supply of base-case coal

} ±16MWe power plant ±88,000 TPA} ±40MWe power plant ±200,000 TPA} ±80MWe power plant ±400,000 TPA

} RAW COAL vs DISCARD } ARISING DISCARD vs DUMP DISCARD} COAL OPTIMISATION AT SOURCE


} The capital and operating expenditures: fuel, water and sorbents costs, waste disposal costs and related items were modeled over 20 years.

} The modeling determines an a LCOE for the 1st year of operation (2017) per scenario that makes the power project economically viable.

} Assumes the power station is established as a project-financed, utility business with a 20 yr IRR of 20% (nominal)

} Assumes a Debt to Equity Ratio, i.e. 75:25, with interest at 9,5% effective assuming a 15 year pay-back period

} Assumes a ZAR:USD Rate of 11:1


Plant Relative LCOE

16MWe 186%

40MWe 135%

80MWe 100%


The ±80MWe Option

a. Its the most cost effective scenariob. Likely relies on a National Procurement Programme and

associated risks.c. Key uncertainty is winning a bid in a National Procurement

Programme

The ±16-40MWe Option

a. Dependent on fuel cost- can benefit an industrial off-takerb. Most within a developer’s controlc. Project could reach financial close based on secured fuel

supply agreement and electricity off-take agreement


Projects offer reasonably “fixed escalation” increases in line withthe Consumer Price Index (CPI) (i.e. coal, logistics, sorbent,maintenance)

versus

Nation Power/ Utility electricity producers – erratic/ politically-driven price increases


1. Discard Coal Power Projects can be very Capital Sensitive,which incorporates Exchange rate strength sensitivity.

2. The Sorbent/ Limestone cost sensitivity, can be significantdependent on the associated logistics and total sulphur (TS) ofthe coal

3. Where Mine Mouth Scenarios are not possible the wheelingcosts and sensitivity is a consideration


} Project Feasibility (aggressive)◦ Feasibility study (fast-track) 12 months◦ EIA & ROD 18-24 months

} Development & Financial Close◦ Technical Specification 3 months◦ Tender Award 3 months◦ Closing Debt 4 months*

(procurement) } Manufacture and Construction

◦ Unit 14-18 months} Commissioning, Commercial Operation

◦ Commissioning 1 months◦ Training and Guarantee Period 15 months


} Power Generation Projects using low quality or discard coal :◦ Are economically viable with the correct fuel supply

contracts,◦ Can stimulate industrial growth and job creation

} The Technology exists:◦ 2nd generation industrial-sized CFB Plants are well

developed◦ Africa experience needs to to be developed with assistance

of established international players


M Mining Services (Pty) Ltd - Fossil Fuel Mining Services (Pty) Ltd} Botswanahasmillions...

Documents

Transcript of M Mining Services (Pty) Ltd - Fossil Fuel Mining Services (Pty) Ltd} Botswanahasmillions...