ESG Objectives 2023-03-22-17-21

ESG Objectives and commitments

Botala wishes to become a producer and distributor of energy with net-zero carbon emissions by integrating energy from CBM with renewables and batteries and participating in carbon offset projects.  This is consistent with Botala’s principles regarding to:

• Health and Safety: The health and safety take priority in decision making.
• Environment: Operate in a sustainable manner, avoiding and minimising environmentally adverse impacts, and promoting environmental and conservation awareness.
• People: Recruit from the local community whenever possible and develop a competent and loyal workforce by providing training, skills transfer and career opportunities.
• Community: Become a valued community member by respecting, understanding and supporting cultural and community values and activities.
• Economic Sustainability: Generate economic value for investors, employees, customers, communities, and Botswana.

Botala is committed to:

• Become a sustainable, environmentally, and socially responsible energy producer.
• Develop, implement, regularly update, and enforce technically, environmentally, socially and culturally sound and responsible policies.
• Optimise benefits for the local economy from our economic, environmental, and social impacts.
• Assist, facilitate and encourage the establishment of compatible, energy related and dependent industries in the Serowe and Palapye regions.
• Comply with corporate governance recommendations of the Australian Securities Exchange and the Botswana Code of Corporate Governance.
• Zero tolerance of bribery and corruption.
• A whistle-blower policy that is publicly available and easily accessible for all employees and other persons engaged by Botala.
• Doing business with integrity and complying with the laws of every country in which we operate.
• Adopt Global Reporting Initiative (GRI) or similar standards to measure compliance with our policies and report Botala’s positive and negative contributions to sustainable development.

1. Environmental, Social and Governance (ESG): Impacts and Opportunities

1.1 Environmental

Exploration, development and production of CBM will continue to be undertaken in compliance with statutory conditions and Botala’s Environmental, Social, Governance and Sustainability Policies.

Environmental impacts are confined mainly to clearing of vegetation for drilling, fire breaks, development of surface infrastructure (network of buried pipelines for the collection and distribution of CBM, complete with pumping stations, collection tanks and various services) and tracks; and management of potentially saline groundwater.

Should water abstracted during CBM production be of suitable quality and quantity, it may be used for irrigation for agriculture such as market gardening. Additional vegetation may have to be cleared for surface pipes, pumps and production.

By minimising soil disturbances and vegetation clearance, and appropriate terrain reshaping and revegetation, these impacts can be managed with no or minimal adverse long-term impacts on flora, vegetation, habitats and wildlife or conflict with the other dominant regional land-uses of grazing and dryland cropping.

Replacing firewood and charcoal with CNG and electricity removes the ongoing destruction, often illegal, of natural woodlands and arid rangelands.

The use of CBM will reduce Botswana’s reliance on coal and diesel generated electricity, firewood and charcoal and thereby reduce carbon dioxide emissions and illegal vegetation clearance.

1.2 Social

Botala’s operations will have socio-economic impacts by creating employment and business opportunities. To ensure that these impacts materialise and benefit the local population, Botala will undertake local and regional socio-economic reviews and consultations to understand the social environment, aspirations, identify opportunities, note pitfalls to be avoided, and develop relevant social and employment policies.

We aim to maximise benefits, prevent mistakes, avoid creating unrealistic expectations, and ensure benefits go to local communities as a priority.

The proposed Serowe Industrial Park, complete with an Energy Hub, is expected to generate the following socio-economic benefits:

• Employment: Development and maintenance of the CBM field will generate direct and indirect employment.
• New industries: A reliable supply of energy should stimulate existing industries and attract new ones, especially those focused on complimenting CBM extraction, such as: irrigation, CNG, hydrogen by pyrolysis of CBM, and carbon black production. Processing carbon black to graphite flakes, graphene and nano-tubes will establish new, high-value and high-tech industries.
• Health: Replacing wood with CBM will reduce the widespread use of wood for cooking and heating and its many health and school attendance related issues (children collecting wood) and remove the need for women to spend many hours per day collecting firewood.
• Market gardening: Depending on the volume and quality of dewatering water, Botala proposes to establish a labour intensive market garden industry.
• National Financial Savings: Increased use of domestically produced energy will reduce the national need to purchase imported energy and fuel and conserve foreign currency.

1.3 Opportunities and impacts

Development of the CBM field will require dedicated exploration, construction and production teams for regional exploration and continuous production drilling, ongoing construction and maintenance of surface facilities and pipelines, marketing and distribution.

This is expected to have the following impacts:

• Employment: permanent and casual employment with opportunity for training, skills transfer and improving a diverse range of technical, construction, maintenance, commercial and management skills. Many of these skills can be recruited from within the greater Serowe region or elsewhere in Botswana, whilst some specialised skills may need to be recruited from outside of Botswana.
• Social: increased employment of a skilled and semiskilled workforce. Care will be taken to ensure that employment of local people is a priority. There is also scope for local skills training.
• Environment: with careful management, potentially adverse impacts on soils, terrain, vegetation, habitats and wildlife can be avoided or mitigated. There may be instances where eroded surfaces can be remediated.

1.3.1 Industrial Park complete with an Energy Hub.

Our proposed Energy Hub will provide reliable energy for operations that Botala proposes to establish on its own or in partnership with other interested Batswana or foreign partners, as well as for other stand-alone industries. Energy options include:

• Solar farm with battery storage.
• Gas generators to make the solar farm a reliable and consistent supplier of electricity.
• CNG production and distribution.
• Hydrogen by pyrolysis of CBM as a fuel for distribution.
• Carbon black value-adding, especially graphite flakes, graphene and nanotubes. This could establish a substantial new age industry requiring research-and-development, engineering, production, and distribution.

These options are expected to have the following impacts:

• Employment: The Energy Hub will require skilled construction teams, experienced operators and management. Most of the skills can be recruited from within the greater Serowe region or Botswana, but some specialised skills may have to be recruited from elsewhere. The Energy Hub should attract other industries, independent of Botala, because of the reliable supply of electricity and other downstream opportunities created by Botala, resulting in further employment opportunities.
• Social: Employment, demand for specialised skills and the need for additional training are the likely main socio-economic impacts. It is important not to create unrealistic employment expectations in the local community.
• Environment: Impacts are likely to be confined to a range of industrial impacts typically associated with an industrial park and energy hub. Other environmental impacts are expected to be addressed in project specific approvals.

1.3.2 Agriculture

Botala aims to use water from ongoing dewatering of CBM wells for irrigated agriculture subject to water quality and quantity. Initial investigations suggest that the water is suitable for agriculture or can be made suitable. The likely volumes and quality of water and effects of dewatering require investigation.

If the water is suitable, Botala will examine the establishment of market gardens to create job opportunities. Land ownership and water rights issues would need to be resolved.

The following impacts are anticipated:

• Employment: This could provide seasonal and permanent employment for the rural workforce, especially women, and provide training in market gardening and irrigation.
• Social: Employment would uplift many unemployed or part-time employed rural residents.
• Environment: Irrigation is likely to be confined entirely to land already used for agriculture. It is unlikely to require special vegetation clearing and should result in increased production from existing agricultural land.

1.3.3 Fuel Switch – Replacing coal with CBM

This is expected to have the following impacts:

• Energy Hub: Use of CBM for the transition to solar and batteries will result in greener energy and reduce carbon emissions relative to the use of electricity derived from coal and diesel.
• Orapa Power Station: Use of Botala’s CBM by the Orapa power station will reduce its carbon emissions relative to imported coal-generated electricity that it will replace.
• Environment: Reduced carbon emissions in line with international and Botswana’s carbon emission objectives.

1.3.4 National financial impact

Replacing imported electricity with local CBM generated electricity and imported diesel with locally produced CNG and hydrogen will reduce import expenditure.

1.3.5 CNG for industrial use

This is expected to have the following impacts:

• Employment: Industrial use of CNG is likely to result in new CNG supply and distribution services, especially in the transport industry and operators of heavy machinery and generators. This should stimulate opportunities in logistics and business management.
• Social: The main social impacts are likely to be benefits associated with increased employment and business opportunities.
• Environment: Conversion of stationary generators, trucks, buses and heavy machinery from diesel to CNG will reduce carbon emissions and demand for diesel and contribute to reducing Botswana’s carbon footprint.

1.3.6 CNG for domestic use

Efforts will be made to market CNG for domestic usage, especially indoor cooking, as an alternative to firewood and charcoal. This is expected to have the following impacts:

• Employment: There will be employment and entrepreneurial opportunities to distribute, sell and refill CNG for domestic use by urban and rural households.
• Social: It is likely to result in at least two important social impacts, namely:
  • Health: Reduce and possibly remove major health issues associated with smoke inhalation from wood fires in small rooms with limited ventilation as is the case in many parts of Africa, including Botswana.
  • Education: In many areas of Botswana firewood is the main source of domestic fuel, necessitating women and children spending many hours collecting firewood. Removing this need will allow women and children to spend their time more beneficially, including school attendance.
• Environment:In many regions the collection of firewood has denuded sparse, arid woodlands and adversely affected their habitats. Substituting CNG for firewood should prevent further habitat destruction by the over-collection of firewood and allow wood and arid zone lands to regenerate.

1.3.7 Wildlife and Conservation

The Serowe CBM Project and associated infrastructure will be located mainly on farm and tribal trust land used for limited cropping and extensive grazing by cattle, some sheep, goats, donkeys, mules and the occasional horse. Many of these farms and tribal trust lands support habitats suitable for wildlife but game is typically sparse due to farming, extensive hunting and poaching.

Botala may purchase some of these farms for ease of operation. Under these circumstances Botala will identify opportunities to return some areas to regional wildlife habitats and refuges and consolidate these into viable conservation areas.

This is expected to have the following impacts:

a) Employment: Employment in land conservation, wildlife management and anti-poaching activities.
b) Social: Contribute to increasing conservation and wildlife awareness.
c) Environment: This is likely to have beneficial impacts in terms of improving habitat quality and providing more protection to wildlife as Botala would not permit hunting and implement anti-poaching measures.

1.4 Summary of main impacts of the Serowe CBM Project

At this stage of exploration and project development, the main impacts can be divided into the following positive and negative impacts:

1.4.1 Positive Impacts

• Facilitate transition from coal to renewable energy.
• Employment and job creation.
• Training and skill improvements.
• Use of local goods and service providers.
• Reduced carbon emissions.
• Reduced dependence on electricity and diesel imports from South Arica.
• Establishment of an Industrial Park, complete with an Energy Hub with a reliable supply of electricity.
• Establishment of new industries, including new-age industries of hydrogen and graphite flakes, graphene and nanotubes.
• Financial: reduce spending on importing electricity and diesel.
• Attract new industries because of:
  • Reliable electricity supply.
  • Support industry for CBM production.
  • Growth in community demand stimulated by Botala’ activities.
• Reduced firewood usage resulting in:
  • Improved health conditions.
  • Remove need to spend many hours collecting firewood.
  • Reduced habitat destruction.

1.4.2 Negative Impacts

Potentially negative impacts are mainly of a social nature and can be minimised, if not avoided, by sound planning and adherence to policies based on a good understanding of local socioeconomics, community aspirations and cultural values.

Potentially adverse impacts include:

a) Recruiting from outside of the Serowe region when locals could have been employed; applies especially to less skilled jobs.
b) Lack of transparency in company operations.
c) Insensitive labour relations.
d) Neglecting suitable training, skills transfers and skill improvements.
e) Overestimating employment opportunities and creating unrealistic community expectations.
f) Not attending adequately to Occupational Health and Safety.
g) Not supporting or respecting culturally important occasions and events.
h) Not staying neutral on political issues not directly affecting Botala.
i) Not complying with Prospecting and Mining Licences and other statutory approvals.