Yesterday, the governments of Botswana and Namibia signed an agreement to construct a 1,500km Trans-Kalahari heavy duty railway to unlock the economic potential of Botswana’s coal fields in the eastern part of the country. The railway is expected to cost approximately $10B and should be ready by 2019 which would be a huge boost for the economy of Botswana, a land-locked country.
Not only is this good news for Botswana and the potential development of its coal fields which have approximately 212 billion tonnes in resources, but this also could be important for Tsodilo Resources (TSD.V) to rail the iron ore from its Xaudum project to the port of Walvis Bay in Namibia. The railway is expected to follow the highway which means that it would be relatively easy for Tsodilo Resources to construct a rail spur to connect Xaudum with the Trans-Kalahari Railway in a later stage. This is obviously good news for the company and we see absolutely no reason for the recent drop in the share price. We initiated a position yesterday.
We are completing an initial report on Tsodilo Resources, which we expect to release early next week.
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Disclosure: The author holds a long position in Tsodilo Resources. Tsodilo is a sponsor of the website. Please see our disclaimer for current positions.
