Home Test Sep 2022 – Minergy Limited

About Minergy

Minergy's 100% owned Masama Coal Mine which is located in the Mmamabula Coalfield of Botswana is the cornerstone asset in the company's strategy. The size and location of this shallow resource supports its competitive cost structure, which is underpinned by cost-effective opencast mining of high quality coal. The resource is near to existing rail, road and water infrastructure, and has significant distance advantages over existing coal suppliers to regional markets.

MASAMA POWER PLANT

The Government of Botswana, acting through the Ministry of Mineral Resources, Green Technology, and Energy Security (“MMGE”) issued a Request for Proposal (“RFP”) on 29 September 2021 to restricted local Botswana bidders. Minergy was selected as one of the four restricted local bidders.

Minergy has partnered with Jarcon Power in order to submit a bid for the design, finance, construction, ownership, operation, maintenance and decommissioning of a 300 MW net greenfield coal-fired power plant in partnership with Minergy, as an Independent Power Producer to the Botswana Power Corporation in Botswana.

This partnership is ideally positioned as it holds a mining license, a fully operational mine, a resource that spans a 390 million tonne Coal Resource and coal sales locally and regionally.

OPERATIONAL

Overburden moved, and coal extracted increased by 82% and 54%, respectively
- For the first time since inception, >1 000 000 tonnes was extracted
Plant throughput volumes, buoyed by the completion of stage 4, increased by 49%
- This supported the production of product mixes in line with forecasts and away from uneconomical fractions
Water utilisation is improving (33% savings in litre per tonne), justifying the investment in the dewatering screen, filter press and rigid screening section
Sales volumes increased by 40% using the six half-yearly measures since start-up; this equates to a 25% compound annual growth rate
- Since inception Minergy has sold more than 1 000 000 tonnes
- Monthly sales volume record >75 000 tonnes achieved in May 2022 on the back of destocking and Free-on-Board (“FOB”) export sales
- Sales of larger, more profitable product sizes into seaborne thermal coal export markets
- Successfully delivering two FOB vessels from Walvis Bay and exporting coal via Zimbabwe to Maputo by rail
Continuous and effective road maintenance of the public road from Medie, albeit expensive, allowing minimal interruptions during the rainy season and supported increased road transport
Bolstering of the management team, including the first female manager appointed as a process engineer

FINANCIAL

Pure coal revenue (ex-transport) increased by 77% to P297 million (2021: P167 million), driven by
- 40% volume increase
- average sales prices increasing by 26%
Increasing cost pressure of diesel and explosives increasing by 127% and 57%, respectively, exacerbated by double-digit inflation in Botswana
A continued trend in decreasing operating expenditures, including employee costs
- Foreign exchange gains from selling in US$ and stable ZAR/ BWP exchange rate
Operating loss improved to P74 million (2021: loss P85 million),primarily due to Minergy achieving breakeven in the last quarter, including individual month profitability, cementing a good foundation for the future
- Cash losses improved from P74 million to P58 million(a 22% improvement from 2021 and 39% improvement from 2020)
P10 million paid in royalties (2021 P5 million) and P5 million paid in withholding taxation which supports the local economy
Net cash used in operating activities increased to P110 million (2021: P37 million) on the back of increased working capital investment contributing a swing of P91 million alone from growth in Q4

HEALTH & SAFETY

Excellent health and safety records

Minergy continues to uphold an outstanding safety record, having had only one minor lost time
injury during FY22. The Company is grateful to be fatality free on the back of strictly managed
health and safety systems.

COVID-19 remained a threat, with a total of 138 cases reported since the pandemic’s start, 78 of which were recorded during FY22. Thankfully, all staff have fully recovered, and the high vaccination rates limit business interruptions.

Minergy is committed to providing its workers with a safe work environment. As of the end of FY22, 89% of employees were fully vaccinated, and a further 8% had received their first vaccine, bringing the total workforce vaccinated to 97%.

SOCIAL AND ENVIRONMENT

Rehabilitation is an ongoing process, and all mining is undertaken within the parameters of the mining licence
- 4,2 million m3 rehabilitated in FY22. This exceeded the total volume rehabilitated since the start of mining operations.
- Increased use of dust suppression to curtail dust and construction of speed humps
96% of the workforce is Batswana, and 97% of the staff are vaccinated
P488 million was spent on local registered company procurement
Corporate social responsibility remains core to Minergy for communities in and around the mining area
- Refer to the Minergy Cares brochure on the website
Citizen Economic Empowerment Plan in place, including using 22 local transporters

Latest News

Minergy experiences exceptional turnaround in fourth quarter FY22

Press releases

Loss-making trend replaced with profitability and positive cash flows 20 September 2022 – Gaborone – Minergy, the coal mining and trading company, today released results […]

September 20, 2022/by WiredWPAdmin

Minergy provides market update

Press coverage

Botswana-based coal miner, Minergy, has provided a voluntary update to the market ahead of releasing its interim results for the period ended 31 December 2021 […]

January 31, 2022/by WiredWPAdmin

more news

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Progress of the Masama Coal Mine

Watch Progress of the Masama Coal Mine

Masama Coal Resource

Minergy’s focus is the development of the Masama Coal Mine within the scope of the Prospecting Licence located on the south western edge of the Mmamabula Coalfield in southern Botswana. Minergy’s wholly owned subsidiary Minergy Coal holds the Prospecting Licence for Coal and Coal-Bed Methane, where a 380Mt Coal Resource has recently been independently delineated.