Title: Planning the future of Botswana's coal

Authors: Khaulani Fichani, Walter C. Labys

Addresses: Natural Resource Economics Program, West Virginia University, P.O. Box 6108, Morgantown, WV 26506–6108, USA. ' Natural Resource Economics Program, West Virginia University, P.O. Box 6108, Morgantown, WV 26506–6108, USA

Abstract: Botswana has vast proven deposits of steam coal, which, for a long time, the government has wanted to develop but without much success. The main objectives of this study are: to forecast possible coal exports from Botswana and the land routes for these exports; to determine the competitiveness of Botswana|s coal in world steam coal trade; to make recommendations on the appropriate policy for the exploitation of this coal. To accomplish these objectives, we construct a model of the global steam coal trade and apply this model to forecast the likely optimal size of mine, timing of capacity, and choice of export port for the years 2005 and 2010 from a 2000 base forecast year. The results of our regional analysis suggest that Botswana|s coal exports are competitive in Asia and Western Europe. These results are shown to be least sensitive to changes in rail transportation costs and marginal supply costs but more sensitive to changes in capital costs for mine development.

Keywords: long run marginal cost function; econometric models; programming models; international steam coal trade model; Botswana; energy policy; coal exports; rail transportation costs; marginal supply costs; capital costs; mine development; coal mines.

DOI: 10.1504/IJGEI.2006.008384

International Journal of Global Energy Issues, 2006 Vol.25 No.1/2, pp.60 - 82

Available online: 15 Dec 2005 *

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