Orapa Mine, the world‘s largest by area will continue mining up to just over 2050 , Orapa Letlhakane & Damtshaa(OLDM) Mines General Manager Bakani Motlhabani revealed on the sidelines of the OLDM 50 Years Anniversary Celebrations in Orapa recently.
Debswana 50 year’s celebrations were held concurrently around three sites, being OLDM, Jwaneng & the Stakeholders offering hosted by the Gaborone head office. When giving welcome remarks at the event Motlhabani explained that being a mining outfit, OLDM community doesn’t play in the space of the glitz and glamour associated with the sparkle of the finished diamond product.
“What we are familiar with is the rhythm and rumbling sounds associated with open pit drilling, blasting, loading and ore processing components hauling and winding 24 hours a day, 7 days a week and 356 days a year. From all these our people unearth gems that transform the lives of many across the world” he said.
Motlhabani explained that OLDM with its three sites produce diverse diamond products, both in volume and quality. “We have the fancy gems from Letlhakane & Damtshaa Mine and the industrial diamonds from Orapa Mine. From 1971 to end of 2018 we have recovered approximately 400 million carats” he said.
Signaling the mine’s ambitious future plans Motlhabani shared that the operation will going forward embrace technology to continue delivering increased shareholder value “As we tread into the interesting and exciting world of technology, innovation and creativity, we are finding it easier and even safer ways of recovering our resource resulting in even better performance results” he said.
Orapa Mine was discovered in 1967 by a team of De Beers geologists led by Manfred Marx. It became fully operational in July 1971 when it was officially opened by the then President of Botswana, His Excellency Sir Seretse Khama. Currently Orapa is mining at a depth of 250 metres and is expected to reach 450 metres by 2026.
The resource consists of one volcanic pipe that separates into two distinct pipes at depth, namely north and south pipes which erupted through Transvaal strata and the overlying Karoo sediments over 200 million years ago. Production normally varies according to mining plans at an average of 12 million carats per year. In 2014, Orapa produced 12 073 522 carats.
Motlhabani said in the past the equipment used in diamond recovery in the 1990s was archaic and not very efficient. “Old x-ray machines were replaced with energy efficient channel displacement machines that led to greater accuracy in recovery without relying on human intervention” he said explaining that it was such advancements that enabled the discovery of Okavango Blue, one of the rarest mineral finds in global history.
The 41.11carats stone was unearthed from the underground terrains of the wide spread AK1 pit of Orapa Mine and recovered at Plant 2 late last year then unveiled in May this year as a 20.46 carat oval shaped precious blue diamond after cutting & polishing. The highly anticipated Orapa Mine expansion was also hinted by Debswana Managing Director Albert Milton at the stakeholder appreciation party held at the Gaborone International Conventions Centre (GICC) the same day.
Currently the mine is relocating an over 500m spread dump on the south side of the pit to the far western side to give way for Cut 3 core extraction boreholes. OLDM also recently closed and decommissioned Slurry Dams 2, a fines residual disposal facility that has been operating for years. The dam has been receiving residues from Orapa No.1 & 2 Plants.
The Mine now developing a world class 6 cell fines residual disposal facility to accommodate Orapa Mine’ s remaining cut 2 ore processing and further take in residues from Cut 3 and beyond. Milton hinted that studies were underway to assess the feasibility of the Cut 3 project with anticipation to expand the mine‘s lifespan by over 30 years.
Cut 3 will involve stripping away waste at the bottom of the mine, as well as widening and deepening the pit. The mine is expected to increase its fleet of trucks from the current 23 to 58. Works to give way for Cut 3 also include relocation of Training Centre and Primary Crashers. Still at the OLDM 50th Anniversary event Vice President of Botswana and also Member of Parliament for Boteti West Slumber Tsogwane said 50 years ago, on 23rd June, a partnership that carried the lives and hopes of many generations of Batswana was born. The Vice President noted that OLDM has been a key driver of development in the Boteti Sub District especially in the areas of Health and Education.
He highlighted that Orapa Hospital has enabled access to improved health care for communities in its sphere of influence. The facility operates as a referral hospital for all village around Orapa and the entire Boteti Sub District, catering for a resident population of approximately 10 000 and regional catchment area of over 54 000 people.
Resident Director of De Beers Holdings Botswana Mr Neo Moroka said the 50th Anniversary brings another opportunity of a re-looking at how Debswana can further pursue global benchmark levels and continue to play a pivotal role in Botswana’s next economic transformation agenda. “This is an opportunity to consider how our iconic company can continue to be an enabler in our common journey towards realizing the goals of our Long Term 2036 Vision,” he said.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”