COUNTRY IN FOCUS
COUNTRY IN FOCUS
Other significant geographical markers are the Okavango Delta in the northwest
and the Makgadikgadi Salt Pan in the centre to northern parts of the country. Most
of the Kalahari is dominated by grasslands and savannas with large nature reserves
where tourism is a major source of income. Prolonged drought has plagued the entire
region over the last couple of years, which has resulted in substantial desertification
and erosion of the countryside. Only 5 % of the agricultural activities can be sustained
by rainfall and the effects of over-grazing and sustenance farming is taking its toll.
Economically, this landlocked country remains strong, with a competitive and
advanced banking system, adhering to global standards in transparency and policies.
It welcomes and continues attracting international investors, but certain sectors are
reserved for citizens and local content. Oil and petroleum products are imported from
South Africa, as well as most of their electricity, with limited domestic production
of electricity from coal power stations. Since rail- and road-networks were gradually
established after independence, it has been a boon for the economy and especially
mining, while the maintenance on roads is given priority. The railway system is well-
maintained and continuously expanding, as well as a national airline.
High levels of literacy, and accredited universities and training institutions capable
of training and providing most of the required skills in-country makes Botswana one
of the top-performing countries in Africa. However, a high HIV infection rate, that the
government has been trying to remediate over the last 20 years with varying degrees
of success, has hampered more rapid development of the economy and populace.
Mining activities in Botswana
The main economic mining activity is centred around diamonds. Other commodities
that are mined to a lesser extent include copper-nickel from the Selebi Phikwe mining
complex, gold near Francistown, and a large coal reserve in the deep south of the
country. There are also minor deposits of iron, platinum and soda ash more to the
north. Mining contributes more than 40% of the current government revenue.
The Department of Mines and Mineral Resources, Green Technology and Energy
Security regulates and maintains the mining database of the country. In October last
year, the government announced that the country would join the Energy Resource
Governance Initiative (ERGI), which supports the discovery of mineral reserves of
strategic metals used to make battery electric vehicles (EVs).
Despite its stability and regulatory certainty, the country could not escape the mining
downturn of late 2019 and, in fact, reported an 8.7% decline in production. Earlier this
year, South Africa regained its number one spot as a mining investment destination,
a position previously held by Botswana. Gold production from the Mupane gold Mine
was lower as a result of the unstable gold price and notable deteriorating lifespan
of the operation. Coal production also decreased, but Botswana did not suffer any
shortfall due to stockpiling.
Kibo Energy remains confident in the future and is continuing with the coal power
station project following signing the first of a series of agreements to implement the
heads of agreement (HoA) with Shumba Energy to reorganise the arrangements for
the Mabesekwa coal independent power project (MCIPP) and the associated coal
asset. On the other hand, Minergy, which operates the Masama mine, has put its
planned listing on the LSE's Aim on hold as a result of unfavourable market conditions.
The sale of unpolished diamonds also suffered a severe collapse of sales, attributed
to the start of the coronavirus outbreak in China, with the luxury shoppers not
being active over the first quarter of 2020. This is likely to impact the Debswana
diamond mining operations too. The country continues to produce large stones, like
Lucara Diamond Corporation that recovered an unbroken 549 carat white diamond
‘of exceptional purity’ from its Karowe mine in February 2020. Other large stones
include the 1 758 carat Sewelô diamond, recovered in April 2019. A feasibility study to
investigate the viability of underground expansion at Karowe, is underway, which is
expected to extend the Life-of-Mine (LoM) to 2040. Botswana, with its long-standing
good history of ethical sourcing, may stand to benefit from the increased interest in
ethically sourced certified engagement rings.
Copper-nickel-cobalt matte, copper in concentrates and silver recorded zero
production, due to the provisional liquidation of the BCL operations. Russia’s
Norilsk Nickel (Nornickel) terminated its agreement for the sale but indicated that
the company will continue legal processes for financial claims against the state of
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African Mining April 2020
18
African Mining April 2020
www. africanmining.co.za