Business Profiles

Jindal Botswana: Growing together

Jindal Steel and Power Ltd is an Indian company with a wide global presence. The multinational conglomerate employs over 50,000 people throughout Asia, Africa and Australia. It is a leader in steel production, and also has a hand in mining, oil and gas, power generation and infrastructure. Operating in these world-turning sectors, Jindal’s influence is as strong as its network is wide. The far-reaching conglomerate is itself just a cog in a larger machine – that of the diversified, US$18 billion O.P Jindal Group. However, the subsidiary has a network of its own – we spoke with Neeraj Saxena, Country Head for Jindal Botswana (Pty) Ltd, currently one of the most exciting and developing branches operating under Jindal Africa.

Around this time of year, parents in many countries traditionally warn their children that if they’re naughty, Santa (or the local equivalent) will leave a lump of coal in their stocking. Whilst this is supposed to be a threat, we only need to read our seasonal Dickens to remember that for Bob Cratchit and his colleagues, coal for the fire was a longed-for Christmas gift. Energy solutions around the world are changing, and yet fossil fuels is still a central facet of not only our energy consumption, but the economies of many of the world’s nations.

Jindal Africa, and the wider Jindal Group, describe themselves as “A global player with local ambitions.” Having started life in India, Jindal Steel and Power Ltd built itself upon a foundation of successful stimulation of local growth. Like India, Jindal saw rich potential in Africa, both in its fossil fuels and wider resources, and also its people. Drawing upon its past of growing with the emerging economic power of the Indian sub-continent, the company saw that it had the experience needed to stimulate a similar rise abroad – with similar conditions, histories and challenges, the company describes their vision as, “both rising economic giants to march together into the future, for the mutual economic and social benefit of their respective peoples.” From that vision, Jindal Africa was born.

Despite being a foreign entity, it is Jindal’s ambition to work with Africa, through Africans, and for Africa. As Jindal Africa’s CEO, Mr Ashish Kumar, has stated, “We come as a foreign entity, but we want to work as a local company.” It is a refreshing approach, as companies in African countries work to better their economy and strengthen their industries, but must often do so in conflict with companies from overseas. Instead, a spanning physical presence throughout the continent has allowed Jindal Africa to provide countless jobs, as well as stimulation to the local economies.

With their headquarters established in Johannesburg, South Africa, for Africa Operations, the company’s US$ 3.5 billion operations have also spread to Mozambique, Botswana, Madagascar, Tanzania, Zambia and Namibia. Across these countries, the company is involved in numerous exploration and mining operations (coal in South Africa and Mozambique, iron ore in South Africa and Namibia, limestone in Madagascar and copper in Tanzania Zambia), and are developing various projects in steel, power and related industries. As well as working to utilize Africa’s rich resources, they are also working to improve the local quality of life for their workers and the wider communities. Out of these, we spoke with Neeraj Saxena, to take a closer look a one of the most exciting sites of operational developments within Jindal Africa; Jindal Botswana.

Botswana is a country filled with posed promise for Jindal. “We have our coal mining license and are in advance stage of discussions in energy sector”, explains Saxena, touching on the two main areas of interest for the company. Jindal Botswana’s plans have all been developed and pursued in alignment with Botswana’s own Vision 2036 and Millennium Development Goals, to make sure that the company’s goals were in step with the country’s own. The aim is to open operational surface mines in the rich coalfields of Mmamabula, as well as opening a power plant in the same area. This power plant will export energy to South Africa after fulfilling the local demand for Botswana, thus making Botswana self-reliant, as well as an exporter of energy in the SADC region. Coal shall be produced to supply the power station and provide export to regional coal markets. Forming the western extension of South Africa’s Waterberg Coalfield, the Mmamabula coalfields are well positioned, just east of a direct road and rail route to the capital city Gaborone. The projects are predicted to create over 2000 new jobs, as well as the employment provided by their construction and development.

In preparation for their move on coal mining, Jindal has acquired Canadian listed coal Company CIC Energy Corp. (CIC) in 2012. The merger cost Jindal US$116 million, but what it gained them was access to CIC’s high quality thermal coal mines in the area, with an estimated 2.4bn tonnes of resource. Thermal coal is not only suitable for the export market, but also for domestic power generation and coal gasification. Kumar, Jindal Africa’s CEO, had this to say at the time of the merger; “This acquisition makes Jindal Africa the frontrunner for building a 1200 MW power plant in Botswana for supply of power to South Africa. This further reinforces Jindal’s philosophy in growing the footprint in Africa, developing the projects in the continent and thus creating sustainable job opportunities.” This is one of two planned power plants for the area. Whilst the 1200 MW will send energy to South Africa, a smaller 300 MW plant is planned as a domestic power project, with the power generated intended for sale to the Botswana Power Corporation.

As well as strengthening their position to develop their planned power plant, the sheer volume of resource would also make it possible to establish a Coal to Hydrocarbons project in connection with the mine. This project aims to counter predicted drops in Botswana’s fuel by converting coal into low Sulphur diesel, using above-ground coal gasification technology to cleanly gasify the coal, and Fischer-Tropsch technology produce diesel fuel and other products. The central and eastern blocks at the Mmamabula Coal Field are currently being considered for the project, as drilling results have shown that the coal in these areas would be suitable for gasification. Studies into the feasibility of this proposed project began in 2007 – it has been a long time in the making, but if it comes together, it will allow Jindal a broader and more efficient use of the wealth at their fingertips, as well as helping to waylay a potential fuel crisis for Botswana.

Remaining coal will be marked for seaborne export. As power stations around the world call out for multi-purpose thermal coal, Jindal Botswana is in a position in increase international trade opportunities for Botswana, thus helping to further stimulate the economy. To make this possible, dedicated mine with multi-product (double stage) beneficiation plants will be constructed, with the aim to produce24 million tonnes per year for 35 years. Jindal Botswana, along with Botswana Railways and Ministry of Transport, have started the negotiations for exporting the coal using the existing facilities through South Africa’s Richards Bay Coal Terminal as well as from Mozambique. Jindal through its Mozambique Mines is already exporting Coaking Coal to Its India Operations.

Evidently, Jindal doesn’t dream small – every aspect of their multi-pronged approach involves layers of investment, planning and construction. Naturally, with this much in the works, some projects are closer to completion than others. “Consolidation and expansion always goes hand in hand – you keep consolidating your operations and expand with new projects.” However, two of their key plans are on the cusp of taking off; “The 300 MW Power Generation plant is in advanced stages of development. This plant will make Botswana a net exporter of power, thus changing the power importer scenario completely. Our Coal Mine development program has also reached a stage where, in very short time, we will start the mine development and make Botswana a coal exporter country.”

Saxena joined the Jindal Group as an engineer, and rose through the company for 16 years before finally attaining his current position as Country Director for Jindal’s Botswana operations. This much time with the company means he has seen many of the company’s plans develop and come into being. In leading the way in Botswana, his faith in Jindal is already strongly founded of years of experience. “The Company is owner, developer and operator of all its assets. Thus, any investment for us is not just commercial or business investment – it is an investment for life, for all stakeholders associated with it.”

These partner and stakeholder relationships are central for Jindal. From their merge with CIC to every aspect of their operations, their focus is on growing the surrounding economy simultaneously with growing their own business. “Only an inclusive growth strategy can bring change, not only in business terms but also in social and economic terms. Inclusive growth of all stakeholders in the business is the success mantra for me.”

“Everything exists because of the relationships and partnerships you make during the journey of your business. All of our major suppliers in steel making, energy and mining are our partners directly or indirectly. We are here because of our strong bonding with all our partners who have made us what we are today.”

Jindal Africa are in a strong position – operating within a global giant of an industrial group, and supported by these sturdy working relationships throughout Africa and beyond, they have much in place to support their ambitious long-term plans. However, given the current state of the coal market, how is Saxena feeling about these long-term plans, and the heavy focus they place on fossil fuels? “Yes, the coal sector is facing some challenges. However, we have to note that 75% of the world’s energy demand is still fulfilled by fossil fuels. Many industry sectors are dependent on the fossil fuel energy sector, and it might take another 50 years for the world to make a proper Energy Mix scenario integrating renewables and fossil fuels.”

As Jindal Botswana face the challenges ahead in executing their many-staged plans, what is it that Saxena feels will set them apart and ensure their success? “Expertise. Experience and zeal to innovate within ourselves. Finally, our Inclusive Growth Mantra, which makes us different from all businesses we are in.”