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The Republic of Botswana plans to construct a $2.5 billion plant to convert coal into liquid fuels in order to reduce the country’s dependence on imported fuel. Operating under a public-private partnership model, the coal-to-liquids plant is expected to produce an estimated 12,000 barrels of diesel and gasoline per day during its planned 30-year lifespan.
“The project has been approved for procurement and production and will primarily be for the local market,” said Gamu Mpofu, Botswana Oil’s Senior Manager responsible for new ventures.
The southern African country imports an estimated 21,000 barrels of liquid fuels per day from its regional neighbour, South Africa, in order to meet 100% of its fuel needs. Botswana does, however, experience unplanned shortages due to South Africa’s intermittent logistical challenges. The land-locked country is endowed with its own 212 billion tons of coal reserves but currently imports 7.5 million barrels of fuel per year.
Despite environmental concerns regarding the use of coal, Botswana seeks to industrialize its economy by capitalizing on its abundant coal reserves. In this regard, Mpofu stated that the country will be proceeding with national plans for using coal to produce fuel, within the bounds of various environmental considerations inked with stakeholders.
Through the planned coal-to-liquid plant, Botswana could mitigate the effects of volatile global oil prices while simultaneously reducing overdependence on fuel imports.