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Morne du Plessis appointed Minergy CEO

Back in April 2017 Minergy Limited listed on the main board of the Botswana Stock Exchange (BSE) with the objective of utilising its 100% owned 390-million tonne Masama Coal Project in the Mmambula Coalfield to become a preeminent coal mining and trading company in southern Africa. 

As the Company’s Chief Executive Officer (CEO) Andre Bojé successfully steered the Company through its listing and mine development after having conceived a company strategy that has positioned the Company to achieve its objective of becoming a significant player in southern African coal mining and trading. On 14 May 2019, Minergy announced that Bojé would be retiring but importantly that he would remain involved in the company to retain oversight and strategic responsibility for group coal marketing and sales for a period of 12 months.

He will also remain part of the team tasked with ensuring the successful listing of Minergy on the Alternative Investment Market (AIM) of the London Stock Exchange. Boje said: “The project is at a stage where it needs hands on executive attention so it’s the right time to step back” and added that “there is an excellent team in place to progress Masama to where we have consistently believed it should be, one of the leading coal suppliers in the southern African region”.

Mokwena Morulane, Non-Executive Chairperson of Minergy, said that Bojé had been the driving force behind taking the project through a multitude of steps, both regulatory and physical, including the listing on the BSE. “Thanks to this, it is now a viable operating coal mine. Andre’s outstanding management, deep understanding of the coal industry and his tenacity are the reasons why we have a workable project today.” He added that retaining Bojé’s expertise in the business for a period of time will allow a smooth transition and cement the establishment of the Masama Coal Project and CEO succession.

Following this, the Minergy Board has announced that Morne du Plessis has been appointed as CEO designate and will step into the position of CEO on 1 August 2019. An extensive candidate selection process, led by Minergy’s Remuneration and Nomination Committee, included both internal and external candidates, ensuring that the Board was in a position to appoint the most qualified and experienced person to fill the role previously held by Boje.

Mr. du Plessis, currently the Chief Financial Officer (CFO) has extensive experience in southern African coal mining and trading sector, particularly in South Africa. He is a chartered accountant with an MBA from Heriot Watt University in Edinburgh, Scotland and has held top management positions for several coal mining and trading groups, including contract mining and beneficiation service provider Genet SA, junior coal miner Umcebo Mining Group, and Johannesburg Stock Exchange listed junior coal miner and trader, Wescoal Holdings Limited.

Du Plessis has been a Director on the Board of the Minergy since January 2017 and has been an integral part of the operational team that developed the Masama project. Commenting on the new appointment, Morulane said that du Plessis’ extensive experience in coal mining and trading, particularly in southern African but also internationally, and his significant listed public company director experience was a significant factor in the Board’s decision to appoint him as CEO.

“He also has a deep and practical understanding of the requirements to implement a modern mining project, with his tenure as Minergy’s CFO giving him in-depth knowledge of Minergy’s flagship Masama Project, in order to bring it into full production over the coming months.”
The commitment to growth within Minergy is further underpinned with several additional appointments having been made recently, including those of Financial Manager Julius Ayo, General Manager of Mining Siyani Makwakwago, and SHE Manager Herbert Kebafetotse.

“I am extremely proud of these appointments for a number of reasons,” said du Plessis, adding that these senior managers are highly skilled, knowledgeable and embrace the Minergy culture of ensuring training across the organisation in order to fulfil the company’s mandate of ensuring a viable coal sector in Botswana.”

“Work is demanding and at the same time very rewarding. I feel that I am part of something big which will create opportunities and transform the lives of many Batswana,” said Ayo. He went on to indicate that that a goal for the finance team is “to ensure the mine remains financially sustainable through effective cost management, disciplined adherence to financial systems, and prudent revenue optimisation”.

New colleague Siyani Makwakwago added to this, saying he believes that the Minergy culture allows people to express their views openly, thereby promoting a diverse approach to resolving any potential issues. “Minergy has afforded me an opportunity to explore my capabilities to the fullest in dealing with varied experiences in a brown field project. Every day is different, interesting and challenging, and I always looking forward to the next day.”

He and the team are looking forward to the day they start feeding coal sustainably and safely through the washing plant and have quality product out through the mine gate onward to customers. SHE Manager Herbert Kebafetotse believes that employees at Minergy have a once in a lifetime opportunity in terms of being part of the construction, commissioning and operation of a potential giant in Botswana’s coal mining history. “The euphoria created by the prospects of bringing an open pit coal mine to its full potential has created a culture of togetherness and team work that will collectively ensure the commissioning and operation of the mine is successful.”

Kebafetotse added that, from a personal perspective, being part of a new operation, with the excitement of starting things from scratch came with a lot of pressure to do so successfully, was what he enjoys most. “From a SHE team perspective, we intend making this the model mine in Botswana by achieving an LTIFR of zero in our first year and thereafter improving on this performance to go beyond the philosophy of ‘zero harm’. To achieve this, we need commitment from all employees, supervisors and managers, and the team is eager to provide a framework for managers to lead the way towards a safe culture at the mine.”

Above and beyond these senior appointments, Martin Bartle, the Managing Director of Minergy Coal (Pty) Ltd has responsibility for the overall performance of the company embracing profitability, mining operations, processing and safety. Minergy has furthermore opened local offices in the villages of Medie and Lentsweletau primarily to ensure that detailed skills audits are conducted and also provide a contact point for various communities to interact with the project. At the moment, of the 246 employees on the mine site, 236 or 96% are Batswana.

Training at the mine site is taking place, mainly through subcontractors, and primarily involving machine operation. “As we transition from the project phase to full production, a vast amount of training will continue to take place and, in this phase, we will really be building coal expertise within Botswana,” du Plessis assured. Bojé said that the company and the mining operation is in good standing and that executive management, as well as mine and technical management, are well equipped to take the project forward successfully.

“I am confident that the operation is in good hands,” he said. In conclusion, du Plessis reiterated Minergy’s ongoing commitment to foster skills development in Botswana, coupled with ensuring the company’s social conscience is directed at uplifting the surrounding villages, such as the recent connection of the local Medie village to the Botswana Power Corporation electrification grid and other planned projects.  “This is the right thing to do and we will ensure that we are remembered for our care as well as our knowledge of the coal sector, which we want to ensure remains a skill set that can be sustained in Botswana.”

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Inflation will bounce back to objective range in 2022- BoB

25th October 2021
Moses Pelaelo

The Monetary Policy Committee (MPC) of the Bank of Botswana decided to maintain the Bank Rate at 3.75 percent at a meeting held on October 21, 2021.  Briefing members of the media moments after the meeting Bank of Botswana Governor Moses Pelaelo explained that Inflation decreased from 8.8 percent in August to 8.4 percent in September 2021, although remaining above the upper bound of the Bank’s medium-term objective range of 3 – 6 percent.

He said Inflation is projected to revert to within the objective range in the second quarter of 2022, mainly on account of the dissipating impact of the recent upward adjustment in value added tax (VAT) and administered prices from the inflation calculation; which altogether contributed 5.2 percentage points to the current level of inflation.  Overall, risks to the inflation outlook are assessed to be skewed to the upside.

These risks include the potential increase in international commodity prices beyond current forecasts; persistence of supply and logistical constraints due to lags in production; possible maintenance of travel restrictions and lockdowns due to the COVID-19 pandemic; domestic risk factors relating to regular annual price adjustments; as well as second-round effects of the recent increases in administered prices and inflation expectations that could lead to generalised higher price adjustments.

Furthermore, aggressive action by governments (for example, the Economic Recovery and Transformation Plan (ERTP)) and major central banks to bolster aggregate demand, as well as the successful rollout of the COVID-19 vaccination programmes, could add pressure to inflation.  These risks are, however, moderated by the possibility of weak domestic and global economic activity, with a likely further dampening effect on productivity due to periodic lockdowns and other forms of restrictions in response to the emergence of new COVID-19 variants.

A slow rollout of vaccines, resulting in the continuance of weak economic activity and the possible decline in international commodity prices could also result in lower inflation, as would capacity constraints in implementing the ERTP initiatives. Real Gross Domestic Product (GDP) for Botswana grew by 4.9 percent in the twelve months to June 2021, compared to a contraction of 5.1 percent in the corresponding period in 2020.

The increase in output is attributable to the expansion in production of both the mining and non-mining sectors, resulting from an improved performance of the economy from a low base in the corresponding period in the previous year. Mining output increased by 3 percent in the year to June 2021, because of a 3.2 percent increase in diamond mining output, compared to a contraction of 19.3 percent in 2020. Similarly, non-mining GDP grew by 5.4 percent in the twelve-month period ending June 2021, compared to a decrease of 0.7 percent in the corresponding period in 2020.

The increase in non-mining GDP was mainly due to expansion in output for construction, diamond traders, transport and storage, wholesale and retail and real estate.  Projections by the Ministry of Finance and Economic Development and the International Monetary Fund (IMF) suggest a rebound in economic growth for Botswana in 2021. The Ministry projects a growth rate of 9.7 percent in 2021, moderating to a growth of 4.3 percent in 2022.  On the other hand, the IMF forecasts the domestic economy to grow by 9.2 percent in 2021; and this is expected to moderate to a growth of 4.7 percent in 2022. The growth outcome will partly depend on success of the vaccine rollout.

According to the October 2021 World Economic Outlook (WEO), global output growth is forecast at 5.9 percent in 2021, 0.1 percentage point lower than in the July 2021 WEO update.  The downward revision reflects downgrades for advanced economies mainly due to supply disruptions, while the growth forecast for low-income countries was lowered as the slow rollout of COVID-19 vaccines weigh down on economic recovery.  Meanwhile, global output growth is anticipated to moderate to 4.9 percent in 2022, as some economies return to their pre-COVID-19 growth levels.

The South African Reserve Bank, for its part, projects that the South African GDP will grow by 5.3 percent in 2021, and slow to 1.7 percent in 2022.  The MPC notes that the short-term adverse developments in the domestic economy occur against a growth-enhancing environment.  These include accommodative monetary conditions, improvements in water and electricity supply, reforms to further improve the business environment and government interventions against COVID-19, including the vaccination rollout programme.

In addition, the successful implementation of ERTP should anchor the growth of exports and preservation of a sufficient buffer of foreign exchange reserves, which have recently fallen to an estimate of P47.9 billion (9.8 months of import cover) in September 2021.  Overall, it is projected that the economy will operate below full capacity in the short to medium term and, therefore, not creating any demand-driven inflationary pressures, going forward.

The projected increase in inflation in the short term is primarily due to transitory supply-side factors that, except for second-round effects and entrenched expectations (for example, through price adjustments by businesses, contractors, property owners and wage negotiations), do not normally attract monetary policy response. In this context, the MPC decided to continue with the accommodative monetary policy stance and maintain the Bank Rate at 3.75 percent.  Governor Moses Pelaelo noted that the Bank stands ready to respond appropriately as conditions warrant.

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SEZA to boost investment through Mayors forum

25th October 2021
SEZA-CEO-Lonely-Mogara

The Special Economic Zones Authority (SEZA) recently launched the Mayor’s forum. The Authority will engage with local governments to improve ease of doing business, boost investment, and fast track the development of Botswana’s Special Economic Zones (SEZs).

The Mayors Forum was established to recognise the vital role that local authorities play in infrastructure development; as they approve applications for planning, building and occupation permits. Local authorities also grant approvals for industrial licenses for manufacturing companies.
SEZA Chief Executive Officer (CEO) Lonely Mogara explained that the Mayor’s Forum was conceptualised after the Authority identified local authorities as critical partners in achieving its mandate and improving the ease of doing business. SEZA intends to develop legal instructions for different Ministries to align relevant laws with the SEZ Act, which will enable the operationalisation of the SEZ incentives.

“Engaging with local government will bring about the much-needed transformation as our SEZs are located in municipalities. For us, a good working relationship with local authorities is the special ingredient required for the efficient facilitation of SEZ investors, which will lead to their competitiveness and ultimate growth,” Mogara stated.

The Mayors Forum will focus on the referral of investors for establishment in different localities, efficient facilitation of investors, infrastructure and property development, and joint monitoring and evaluation of the SEZ programme at the local level. SEZA believes that collaborating with local authorities will bring about much-needed transformation in the areas where SEZs are located and ultimately within the national economy. Against this background, the concept of hosting a Mayors Forum was birthed to identify and provide solutions to possible barriers inhibiting ease of doing business.

One of the key outcomes of the Mayors Forum is the free flow of information between SEZA and local authorities. Further, the two will work together to change the business environment and achieve efficiency and competitiveness within the SEZs. Francistown Mayor Godisang Rasesigo was elected as the founding Chairman of the Mayors Forum. The forum will also include the executive leadership of all city, town and district councils, among them Mayors, City or Council Chairpersons, Town Clerks and District Commissioners.

Mogara explained that initial efforts would engage the local government in areas that host SEZA’s eight SEZs: Gaborone, Lobatse, Selebi Phikwe, Palapye, Francistown, Pandamatenga and Tuli Block. Meanwhile, Mogara told WeekendPost that they are confident that a modest 150 000 jobs could be unleashed in the next two to five years through a partnership with other government entities. He is adamant that the jobs will come from all the nine designated economic zones.

This publication gathers that the Authority is currently sitting on about P30 billion worth of investment. The investment, it is suggested, could be said to be locked up in government bureaucracy, awaiting the proper signatures for projects to take off. Mogara informed this publication that the Authority onboard investors who are bringing P200 million and above. He pointed out that more are injecting P1 billion investments compared to the lower stratum of their drive.

SEZA’s mandate hinges on the nine Special Economic Zones – being Gaborone (SSKIA), whose focus is of Mixed-use (Diamond Beneficiation, Aviation); Gaborone (Fairgrounds) for Financial services, professional services and corporate HQ village; Lobatse for Beef, leather & biogas park; Pandamatenga designated for Agriculture (cereal production); Selibe Phikwe area which is also of a Mixed-Use (Base metal beneficiation & value addition), Tuli Block Integrated coal value addition, dry port logistics centre, coal power generation and export; Francistown is set aside for International Multimodal logistics hub/ Mixed Use (Mining, logistics and downstream value-adding hub); whilst Palapye is for Horticulture.

The knowledge economy buzz speaks to SEZA’s agenda, according to Mogara. The CEO is determined to ensure that SEZA gets the buy-in from the government, parastatals and the private sector to deliver Botswana to a high economic status. “This will ensure more jobs, less poverty, more investment, and indeed wealth for Batswana,” quipped the enthusiastic Mogara. SEZA was established through the SEZ Act of 2015 and mandated with establishing, developing and managing the country’s SEZs. The Authority was tasked with creating a conducive domestic and foreign direct investment, diversifying the economy and increasing exports to facilitate employment creation.

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De Beers Q3 production up 28 %

25th October 2021
De-Beers

De Beers rough diamond production for the third quarter of 2021 increased by 28% to 9.2 million carats, reflecting planned higher Production to meet more robust demand for rough diamonds. In Botswana, Production increased by 33% to 6.4 million carats, primarily driven by the planned treatment of higher-grade ore at Jwaneng, partly offset by lower Production at Orapa due to the scheduled closure of Plant 1.

Namibia’s Production increased by 65% to 0.4 million carats, reflecting the marine fleet’s suspension during Q3 2020 as part of the response to lower demand at that time. South Africa production increased by 34% to 1.6 million carats due to the planned treatment of higher grade ore from the final cut of the Venetia open pit and an improvement in plant performance. Production in Canada decreased by 13% to 0.8 million carats due to lower grade ore being processed.

Demand for rough diamonds continued to be robust, with positive midstream sentiment reflecting strong demand for polished diamond jewellery, particularly in the key markets of the US and China. Rough diamond sales totalled 7.8 million carats (7.0 million carats on a consolidated basis) from two Sights, compared with 6.6 million carats (6.5 million carats on a consolidated basis) from three Sights in Q3 2020 and 7.3 million carats (6.5 million carats on consolidated basis) from two Sights in Q2 2021.

De Beers tightened Production guidance to 32 million carats (previously 32-33 million carats) due to continuing operational challenges, subject to the extent of any further Covid-19 related disruptions. Commenting on the production figures, Mark Cutifani, Chief Executive of De Beers parent company Anglo American, said: “Production is up 2%(1) compared to Q3 of last year, with our operating levels generally maintained at approximately 95%(2) of normal capacity.

The increase in Production is led by planned higher rough diamond production at De Beers, increased output from our Minas-Rio iron ore operation in Brazil, reflecting the planned pipeline maintenance in Q3 2020, and improved plant performance at our Kumba iron ore operations in South Africa. “We are broadly on track to deliver our full-year production guidance across all products while taking the opportunity to tighten up the guidance for diamonds, copper, and iron ore within our current range as we approach the end of the year.

“Our copper operations in Chile continue to work hard on mitigating the risk of water availability due to the challenges presented by the longest drought on record for the region, including sourcing water that is not suitable for use elsewhere and further increasing water recycling.”
On Wednesday, De Beers announced the value of rough diamond sales (Global Sightholder Sales and Auctions) for the eighth sales cycle of 2021. The company raked in US$ 490 million for the cycle, a slight improvement when compared to US$467 million recorded in 2020 cycle 8.

Owing to the restrictions on the movement of people and products in various jurisdictions around the globe, De Beers Group has continued to implement a more flexible approach to rough diamond sales during the eighth sales cycle of 2021, with the Sight event extended beyond its normal week-long duration.   As a result, the provisional rough diamond sales figure quoted for Cycle 8 represents the expected sales value from 4 October to 19 October. It remains subject to adjustment based on final completed sales.

Commenting on the cycle 8 sales De Beers Group Chief Executive Officer Bruce Cleaver said that: “As the diamond sector prepares for the key holiday season and US consumer demand for diamond jewellery continues to perform strongly, we saw further robust demand for rough diamonds in the eighth sales cycle of the year ahead of the Diwali holiday when demand for rough diamonds is likely to be affected by the closure of polishing factories in India.”

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