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Homeland weighs building SA power plants
Innocent Madawo
Posted: Wed, 05 Mar 2008

[miningmx.com] -- ENERGY exploration and development company Homeland Energy Group Limited, which listed on the TSX on Wednesday, is in discussions with South Africa’s state power utility, Eskom, to supply coal to existing power generation plants.

Homeland is also considering building its own plants to generate thermal power privately under a new provision approved by the South African government last November, said CEO Stephen Coates.

Homeland Energy Group was formed after a merger at the end of February between Homeland Energy Corporation and Chrysalis Capital Corporation. The new company started trading on the Toronto Stock Exchange on Wednesday to raise money for its power projects in southern Africa.

It has 145 million common shares issued and outstanding, with an opening stock price of C$1.50.

The company has invested up to R150 million in its Kendal Mine, Northfield and Eloff Phase I and II projects in South Africa. Kendal will be the first to produce coal at least 90 days after the government has issued Homeland with the requisite licence.

“Kendal is ready. Projected production is 1.8 million tonnes of coal per year, of which, the bulk will go into generation of electricity and the rest will be for industrial uses,” said Coates.

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“We are hitting the market when our products are generating great interest,” he said in obvious reference to the energy crisis in South Africa where the company has the bulk of its assets.

“It is nice to be part of a solution and we certainly have the ability to help supply South Africa’s energy needs,” Coates said on the sidelines of the Canada-South Africa Chamber meeting in Toronto.

Homeland owns three advanced development coal projects as well as a number of early stage exploration properties in South Africa.

Coates told a MINEAfrica seminar the company’s thermal power projects at Kendal and Northfields should begin production in the second quarter of 2008, while Eloff Phase I would start in the last quarter of 2009 and and Eloff Phase II a year later.

Homeland is currently negotiating to acquire interests in a number of additional coal properties in eastern South Africa and neighbouring countries, particularly Botswana, which is said to have the largest untapped coal resources in the region.

Two companies, CIC Energy and Sentula's joint venture with Jonah and Aquila Resources called Asenjo Energy, are planning the construction of power plants and coal-to-liquid fuel projects there, taking advantage of massive coal deposits in Botswana.