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Botswana to Seek Bids for $11 Billion Rail-Line Project for Coal

March 12 (Bloomberg) -- Botswana, the world’s largest producer of diamonds, plans to seek initial bids for the construction of an $11 billion railway line connecting its biggest coal-mining region to a port in neighboring Namibia.

The land-locked southern African nation may list tenders by September to build a 1,500-kilometer (930-mile) rail line from its coal fields in the east to Walvis Bay in Namibia, Botswana Chamber of Mines Chief Executive Officer Charles Siwawa said today in an interview in Goa, India. The country is considering building a $4 billion coal port at Walvis Bay.

Demand from China, India and Japan for coal from Africa is fueling development of mines outside of South Africa and construction of rail lines and ports necessary to ship the fuel to buyers. Botswana is betting that neighbors Namibia and Mozambique will work with it to expand transportation capacity for commodities as the country seeks to reduce its dependence on revenue from diamonds.

“Despite large reserves of thermal coal, Botswana doesn’t feature in the radar of importing nations,” Siwawa said. “We are opening up in a big way and in three to four years, I am hopeful there will be a shift.”

Coal will come close to surpassing oil as the world’s top energy source by 2017, the International Energy Agency said in a report in December. In that period, coal usage will increase in every region of the world except in the U.S., where the fuel is being pushed out by natural gas, it said.

The railway line and the port in Namibia would allow the country to export as much as 40 million metric tons a year of power-station coal, about half of what South Africa exports a year, he said. Exports may climb to as much as 115 million tons in seven years, he said. Botswana currently produces 3 million tons annually of thermal coal and consumes all of it.

To contact the reporters on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net; Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net; Jason Rogers at jrogers73@bloomberg.net

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