MASHALE Phumaphi’s Shumba Energy responded in double-quick time to events at Eskom, the South African power utility, and the South African economy at large during 2017. Seeing that the chronic power supply deficit in South Africa had swiftly become a surplus, the Botswana firm cooled plans to export electricity in favour of a coal marketing strategy that hopes to capitalise on the rebound in spot coal pricing. Most of Shumba’s decision-making, therefore, could be interpreted as an attempt to build regional and export coal trading capabilities, although it has kept a level of optionality on coal-fired independent power production (IPP). Hence, in February, it nominated HMS Bergbau Africa as its exclusive export coal marketing agency. Months later, it signed an agreement to buy the Morupule South Coal Project from Hodges Resources, which could provide 1.2bn tonnes of open-cut coal for supply to the Botswana and regional industrial markets. The deal of note, however, was in November when Shumba agreed to sell 85% of its Mabesekwa prospect – a proposed $1bn, 300MW to 600MW IPP – to Kibo Mining in return for a 28% stake in the coal-to-power firm. It gets a seat on Kibo’s board and some exposure into coal-to-power IPP as well as first right of refusal on coal export sales Kibo might contemplate. Shumba also signed a 20,000 tonnes supply agreement with a regional buyer and retained Basil Read as its mining contractor.
LIFE OF MASHALE
Bleak winters in the UK where he was working as an investment banker, and the realisation that it might be more fun to do the mining, took Mashale into Shumba Energy. He began his career as an engineer for Debswana Diamond Company at its Jwaneng mine. Mashale holds a Master’s in engineering from the University of Sheffield and is a member of the United Kingdom Society of Investment Professionals.
- Web Address: www.shumbaenergy.com