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Fluor wins Khoemacau EPCM

Global engineering group Flour Corporation on Tuesday announced another major mining development contract in Botswana. Canyon Capital a company developing the Khoemacau Copper & Silver projects has awarded the American conceived giant Engineering  Procurement & Construction Management (EPCM)  services for it’s over P5 billion mining undertaking aimed at  unearthing the base metals for the next 21 years.

Fluor booked the undisclosed contract value in the second quarter of 2019.According to the New York Stock Exchange Listed multinational engineering outfit the contract follows a successfully working relationship after they worked with Canyon Capital on the first phase of preliminary and cost determinacy designs.

“We worked closely with Cupric Canyon in the project’s front-end engineering and design phase to establish a capital-efficient design and execution plan for the project,” said Tony Morgan President of Fluor’s Mining & Metals Business in a statement released from Irving Texas United States on Tuesday.

Fluor was also involved in construction management of the early works for the camp upgrade, bush clearing, transport corridor and surface infrastructure terrace preparation. In this next phase of intense mining infrastructure designs and reconfigurations Fluor’s scope entails upgrading the existing copper concentrator plant and new mine surface infrastructure.

The project is expected to produce an annual average of 62,000 metric tons of copper and 1.9 million ounces of silver with a life of mine in excess of 20 years. “We will leverage our local capabilities and extensive copper experience to execute the Khoemacau project with excellence, safely, on time, on budget and with quality,” added Morgan.

Engineering, Procurement, & Construction Management (EPCM) Contracts arrangement are common set ups used in mega industrial projects where a significant number of trade contactors are involved. On an EPCM contract the client employs the necessary trade contractors to construct the works. The EPCM 'contractor' designs the project, and then acts as a construction manager, coordinating the procurement process and then managing the trade contractors.

Effectively they are performing the role of a consultant during the construction phase. An EPCM contractor is not directly involved in the building and construction of the project, but is rather responsible for the detailed design and overall management of the project, on behalf of the owner or principal.

The EPCM contractor is mandated with ensuring that the engineering and design of the project is in compliance with the projects technical and functional specifications. Supervising, management and coordinating construction interface in accordance with a detailed schedule is the key responsibility of the EPCM contractor. When a need arises during the tenure of the project the EPCM contractor takes full responsibility of   establishing contractual arrangements on behalf of the owner with other contractors, vendors, sub-contractors and sub-vendors, through a tender process.

Flour Corporation raking 164 on the Global fortune 500 company’s scale, at an annual revenue of around $20billion established an office in Botswana in 2015 and has managed and delivered one of the country’s major projects. In September 2012 the company completed Jwaneng Mine expansion works, an over P3.5 billion project that delivered Cut 8. The Jwaneng Cut 8 was an over P24 billion mining investment that boosted mine’s lifespan from 2017 to 2024. Debswana has since commenced Cut 9, an over P15 billion project that will take Jwaneng to 2034.

During expansion into Cut 8 Fluor performed engineering, procurement, and construction management services for associated relocation and rebuilding of the mine surface infrastructure and completed the project in September 2012.Cut 8  enabled  the removal of overburden to allow the mine to access 91 million tonnes of ore that will yielding 102 million carats of diamonds until and 2024 .The P24 billion  Cut 8 project was and still remains  the largest ever single capital commitment in Botswana’s private sector.

The Khoemacau Copper & Silver Project is located in the North East of Botswana in the Ngamiland district, the project encompasses Kalahari Copper belt and the Bosetu Resource, the latter was acquired from Australian  Based Discovery Metal after insolvency in 2013.Early this year by Cupric Canyon Capital announced the successful signing of US$565 million (around P 5.9 billion) capital injection, as funding package to commence development of the Khoemacau project to unearth high grade copper and silver concentrate.

The US$565 million of funding comprised  a US$275 million (P2.9 billion) senior debt facility from Red Kite Mine Finance and a US$265 million (P2.8 billion) silver stream from Royal Gold AG a wholly owned subsidiary of Royal Gold, and a US$25 million (P263 million) subordinated debt facility also from Royal Gold.

During funding announcement Chief Executive Officer of Cupric Canyon Capital Johan Ferreira explained that the deal was expected to be closed in the 2nd quarter of 2019 opening giving way for second phase of construction which is expected to run for two years pushing the Starter Project to produce first sellable concentrate beginning in the first half of 2021, with subsequent ramp-up.

Flour‘s EPCM contract is also noted to included overseeing the upgrade of existing Expansion Project pre-feasibility study to a definitive feasibility study.

The Expansion Project includes the construction of a new 5.8 million tonnes per annum processing facility near Zone 5 which will produce approximately 100,000 tonnes of copper per annum. Founded in 1912, Flour Corporation is a global engineering, procurement, fabrication, construction and maintenance company that transforms the world by building prosperity and empowering progress. Fluor serves its clients by designing, building and maintaining safe, well executed, capital-efficient projects around the world. With headquarters in Irving, Texas, Fluor ranks 164 on the Fortune 500 list with revenue of $19.2 billion in 2018 and has more than 53,000 employees worldwide.

Head of Mining Base Metal Business at Flour Torny Morgan says his company has worked in Botswana since the early 2000s and opened an office in Gaborone in 2015. “From Gaborone, we deliver safety, cost-competitive innovations and execution excellence to clients. Fluor conducts business in a socially, economically and environmentally responsible manner, and the Botswana office provides local employment opportunities and supplier and skills development.” He said.

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Business

Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services

 

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Business

Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.

 

 

 

 

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Business

Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. “However, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.

 

 

 

 

 

 

 

 

 

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