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BoB frustrated by cyber-based illegal operations

Bank of Botswana (BoB) admitted in its latest Banking Supervision Report that it is failing to crack down illicit cyber-based banking business operations in the form of pyramid schemes and illegal deposit-takings because “the Bank is constrained in taking any action against operations based outside its jurisdiction.”

According to the Banking Supervision Report 2017, “the current challenge relates to cyber-based operations, with no local or cross-border physical location, as the Bank is constrained in taking any action against operations based outside its jurisdiction.” The Central Bank says during 2017, BoB investigated two illegal banking business operations and one originated from Botswana while the other was web-based and originated from  South Africa. According to the Report, the schemes were Botswana Index Rating (Pty) Limited and Pipcoin owned by Refiloe Nkele who is popularly known as Ref Wayne.

Information gathered by this publication is that Nkele and other web-based illegal operators have proved to be handful to the central bank and continue to operate illegally. According to the Banking Supervision Report 2017 these operators make sure they amass enough capital through cyber transactions and collapse the scheme along the way leaving their clientele in limbo without any trace.

“…The unsustainability of such ventures is revealed when the schemes collapse and investors lose their money and seek the intervention of the Bank,” says the BoB report. Last year Nkele came to Botswana and was thronged by multitudes at the Gaborone International Convention Centre who wanted to “learn about forex trade.” This event raised public debate emanating from mixed reactions about the self-proclaimed millionaire’s credentials and claim to fame and fortune.

However Nkele’s reputation took a knock in Botswana borders just after the Gaborone event following the self-proclaimed billionaire’s post of Botswana Stock Exchange (BSE) logo on social media without consent. The BSE complained and stated that “we did not consent to the use of the BSE logo.”  The BSE embarrassing statement against Nkele was followed by BoB exposing Nkele as an agent of illegal online pyramid scheme.

While the Bank shut down Banking Index Rating, ordering it to “cease and desist” from all activities involving the acceptance of money from the public, Nkele or Pipcoin was referred by BoB to the South African central bank. “In relation to Pipcoin, the Bank consulted the South African Reserve Bank (SARB), which confirmed that the company had contravened the South African Banks Act 94 of 1990 by taking deposits illegally from members of the public.

The SARB indicated that the matter had been referred to the National Prosecuting Authority of South Africa for appropriate action. This notwithstanding, the Bank also concluded that Pipcoin’s activities constituted illegal deposit-taking and contravened Section 3(1) of the Banking Act, which restricts transacting banking business and/or soliciting deposits of money to licensed banks. The Bank issued a press release warning the public about illegal deposit-taking activities and advised them to desist from participating in such unlicensed schemes,” said the Banking Supervision Report 2017.

Parliament of Botswana has promulgated the Consumer Protection Act which prescribes the multiplication, pyramid, chain letter schemes and other related activities as illegal ventures. The Bank of Botswana Act stipulates that the business of taking deposits of money from members of the public is the preserve of licensed banks since this part constitutes banking business.

When launching the BoB’s Monetary Policy Report at the just ended National Business Conference, Governor Moses Pelaelo emphasized the Bank’s role in protecting the country’s financial system and the consumers. He said this will help Botswana move well-oiled economically in the journey towards high income status. The theme of the conference was “Breaking through to a High-Income Botswana – The Role of the Private Sector in Charting the Path” and Pelaelo said its intent is “to project the relevance and role of the Bank of Botswana in contributing to the journey towards high income status for Botswana.”

When explaining the supervisory, regulatory or overview role of the Bank Pelaelo, “to give perspective, you will be aware, Distinguished Ladies and Gentlemen, that the Bank exists to protect the value of the local currency, the Pula and thebe, through currency management operations, monetary policy, exchange rate management, regulation and supervision of relevant financial institutions and facilitating sound payments and settlement frameworks.

Essentially, the Bank promotes the desire and willingness to hold the local currency, as well as to transact and save locally in Pula premised on the quality and durability of the banknotes and coin; stable, predictable domestic price changes; safety and soundness of the financial system and reliable payment infrastructure. Inevitably, where central banks fail to achieve these outcomes, or are constrained by political interference, economic performance and development suffer 4 considerably; recent examples include Venezuela and Zimbabwe.”

By fostering appropriate conditions, Pelaelo said, the central bank has throughout its 43 years of existence contributed to stability of the macroeconomic environment and financial system, as well as integrity and reliability of payments and settlement platforms. He said this enables economic activity, as manifested in the ability to transact and access financial service.

BoB launches Monetary Policy Report

Last week during the National Business Conference the central bank kicked off its first ever Monetary Policy Report. BoB also explained its relevance in influencing expectations and economic activity. The Bank will publish four Monetary Policy Reports each calendar year in April, August and October will be preceded by the Monetary Policy Statement in February each year.

“The Monetary Policy Report will be the main medium through which the Bank will inform the public about the formulation and implementation of monetary policy. It serves to meet the public’s expectation of a transparent and accountable central bank in fulfilling the monetary policy mandate,” said Governor Pelaelo.

Pelaelo also said the Monetory Policy Report was made in an effort to further improve on communication and transparency on economic and policy analysis and implementation. The Monetary Policy Report also provides a comprehensive, forward-looking framework for policy formulation by the MPC and serves as a basis for policy decisions.

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The  Bulb World CEO selected for Africa’s prestigious award

22nd July 2021

The Bulb World Chief Executive Officer (CEO) and entrepreneur, Ketshephaone Jacob has been selected as a 2021 Top 50 Africa’s Business Hero.

Jacob was chosen from a pool of 12,000 applicants – many of whom are highly-skilled and accomplished entrepreneurs.

Africa’s Business Hero, sponsored by technology entrepreneur, Jack Ma, aims to identify, support and inspire the next generation of African entrepreneurs who are making a difference in their local communities, working to solve the most pressing problems, and building a more sustainable and inclusive economy for the future.

The initiative is as inclusive as possible and applications were open in English and French to entrepreneurs from all African countries, all sectors, and all ages who operate businesses formally registered and headquartered in an African country, and that have a 3 year-track record.

Every year, finalists are selected to compete in the ABH finale pitch competition and participate in a TV Show that will be broadcast online and across the continent.

The finalists will compete for a share of US $1.5 million in grant money.

The Bulb World, is home grown LED light manufacturing company, which was partly funded by Citizen Entrepreneurial Development Agency (CEDA) at the tune of P4 million, to manufacture LED lighting bulbs for both commercial and residential use in 2017.

The Bulb World operate from the Special Economic Zone of Selibe Phikwe. Early this year, The BulB World announced its expansion to South Africa, setting in motion its ambitious Africa expansion plan.

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Mining production down 12 % IN Q1 2021

14th July 2021

During the first quarter of 2021, production in Botswana’s economic nucleus- the mining sector contracted by 12 percent. This is according to Mining Production Index released by Statistics Botswana this week.

The country’s central data body revealed that Index of Mining production stood at 74.4 during the first quarter of 2021, showing a negative year on-year growth of 12.0 percent, from 84.6 registered during the first quarter of 2020.

The main contributor to the decline in mining production came from the Diamonds sector, which contributed negative 11.7 percentage points. Soda Ash was the only positive contributor in the mining production, contributing 0.1 of a percentage point. However Soda Ash’s contribution was insignificant to offset the negative contribution made by Diamonds.

The quarter-on-quarter analysis by Statistics Botswana experts shows an increase of 16.3 percent from the index of 64.0 during the fourth quarter of 2020 to 74.4 observed during the period under review.

Diamond production decreased by 12.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. The decrease was as a result of planned strategy to align production with weaker trading conditions mostly linked to Covid-19 protocols restrictions.

Botswana’s diamond sector is underpinned by Debswana, the country’s flagship rough producer- a 50-50 joint venture between government and global mining giant De Beers Group. The other producer is Canadian based Lucara Diamond Corp through its wholly owned Karowe Mine which is a relatively small but significant production that has made a name for itself worldwide with rare diamond recoveries of unprecedented carat size.

On the other hand, quarter-on quarter analysis shows that production has improved, registering a positive growth of 17.5 percent during the first quarter of 2021 compared to the preceding quarter – 2020 Q4.

Though production was significantly lower in the first quarter, the two producers ended Q2 with rare diamond recoveries. Debswana early last month found the world’s third largest gem diamond – weighing 1098 carat at Jwaneng Mine, its flagship gem quality diamonds producer, also regarded the world’s richest diamond mine.

A week later Lucara  announced its second biggest recovery, the 1174 carat clivage near-gem dug from its Karowe Mine. The diamond is the world third in carat size after the plus-3000 carat Cullinan found in South Africa back in 1905 and the 1758 carat Sewelo unearthed at its Karowe mine in 2019. Debswana and Lucara are investing billions of pulas in underground mining projects to extend the life of its mines, Jwaneng & Karowe respectively.

In terms of Gold which is produced at Mupani mine near Botswana’s second city of Francistown output decreased by 17.9 percent during the first quarter of 2021 compared to the same quarter of the previous year.

Similarly, quarter-on-quarter analysis reflects that production decreased by 21.4 percent during the first quarter of 2021, compared to the preceding quarter. The decrease was as a result of the deteriorating lifespan of the mine as well as the impact of COVID-19 which slowed down the mining activities.

Soda Ash production increased by 11.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. In terms of quarter-on-quarter Soda Ash production also showed an increase, picking up by 2.1 percent during the period under review. The increase in production is attributable to the effectiveness of the plant following refurbishment which occurred in the third quarter of 2020.

Salt production decreased by 34.0 percent during the first quarter of 2021, compared to the same quarter of the previous year. Similarly, the quarter-on-quarter analysis shows that salt production registered a decrease of 32.9 percent during the period under review. Both salt and Sodash are produced by partly government owned Botswana Ash (BotsAsh) operating from Sowa town near Makgadikgadi pans.

Coal production decreased by 11.2 percent during the first quarter of 2021, compared to the corresponding quarter of the previous year. The decrease was attributed to the reduced demand from Morupule B Power Station following the remedial works being undertaken, as one boiler was in operation during the period under review.

Although production fell, Statistics Botswana says there was no shortfall in supply of coal due to stockpiling. On the other hand, the quarter-on-quarter comparison shows that coal production increased by 20.4 percent compared to the preceding quarter.

Botswana’s flagship coal producer is Morupule Coal Mine; a wholly state owned mining company located in Palapye producing primarily for Botswana Power Corporation (BPC)’s power generation plants Morupule A & B.

The other coal producer is Botswana Stock Exchange listed Minergy which operates a 390 MT Coal Resource mine in Masama near Media in the southwestern edge of the Mmamabula Coalfields.

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Gov’t awards mining licence for Gantsi Copper Mine

14th July 2021
Moagi

Department of Mines in the Ministry of Mineral Resources, Green Technology & Energy Security has awarded mining licence to Tshukudu Metals-a subsidiary of Aussie firm Sandfire Resources ,giving the company a green light to start piecing the ground at its Motheo Copper Project near Gantsi.

Lefoko Moagi, minister in charge of mineral resources in Botswana confirmed to weekendpost on Tuesday. Minister Moagi revealed that “the licence has been approved , but Sandfire Resources as a listed company will report to its shareholders and investors then make an official public statement” he said.

Based on a forecast copper price of US$3.16/lb (reflecting current long-term consensus pricing) the Base Case 3.2Mtpa – Ghantsi copper project is forecast to generate US$664 million (over P7 billion) in pre-tax free cash-flow and US$987 million (over P10 billion) in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations.

In December 2020, the Board of Sandfire Resources approved the commercial development of the Motheo Copper Mine located in the Kalahari Copper Belt in Botswana, marking a key step in its transformation into a global, diversified, and sustainable mining company.

Tshukudu Metals Botswana (Pty) Limited (Tshukudu) a 100% owned subsidiary will be the owner and operator of the Motheo Copper Mine which is scheduled to produce up to 30,000 tonnes per annum of copper in concentrate over a 12 year mine life.TMB is targeting development of its Motheo Copper Mine in 2021 and 2022, with its first production in 2023.

GOVERNMENT NOT TAKING UP 15 % STAKE ON OFFER

Beginning of this year presentations were made to the Department of Mines as part of the Mining Licence approval process and to the Ghanzi Regional Council, additional information was requested by Department of Mines in April and was duly supplied by the company.

As part of the Mining Licence approval process, the Government of Botswana has a right to acquire up to a 15% fully contributing interest in all mining projects locally. Quizzed on whether government through Mineral Development Corporation Botswana (MDCB) would be taking up stake in the project Minister Moagi said, “No consideration is being made on that regard”.

“Government is not considering taking up a stake in the Ghantsi Copper Mine project, every opportunity is assessed on all risks, but Government makes money all the while from leases, taxes and royalties, remember if you take stake you are liable for liabilities of the project as well,” Moagi said.

MINING CONTRACT

Last month Sandfire announced that it has awarded over P5 billion worth mining contract to African Mining Services (AMS), a subsidiary of Perenti, to deliver the open cast operation.

The contract, which has an estimated value of US$496 million (over 5 billion), is the largest single operational contract for the new Motheo Project covering a period of 7 years and 3 months, with provision for a one-year extension.

The contract according to Sandfire Resources was awarded following a competitive 3-stage tender process which saw a number of key factors taken into consideration when selecting the preferred contractor.

These included Citizen Economic Empowerment, safety culture, equipment suitability and availability, commercial terms and identified improvement opportunities. Under the terms of the contract, AMS has agreed to form a 70:30 Joint Venture with a suitable local Botswana partner or partners.

The JV is expected to be finalized ahead of commencement of mining in early 2022. African Mining Services has been operating in Africa for over 30 years. AMS’ parent company, ASX listed diversified mining services group Perenti, already has a presence in Botswana through Barminco, their underground mining division, at the large-scale Khoemacau Copper Mine located 200km north-east of Motheo.

Last month Sandfire executives said the award of the open pit mining contract represents another key milestone in advancing the Motheo Project towards production, with all components of the contract in line with the key parameters outlined in the December 2020 Definitive Feasibility Study (DFS).

The company said full-scale construction of the US$279 million (over P 3 billion ) mine development is expected to commence immediately upon receipt of the Mining Licence, with mining scheduled to commence in early 2022 ahead of first production in early 2023. This week Sandfire Resources advertised over 10 positions in calling on applications from geologists, mining engineers and geotechnical engineers.

The Motheo mine has an initial mine life of 12.5 years based on production from the T3 pit. The initial development is expected to generate approximately 1,000 jobs during the construction phase and 600 direct full-time jobs during operations, with at least 95% of the total mine workforce expected to be made of up of Botswana citizens.

Later in the week Sandfire Resources announced in the company website that it has received the licence. Sandfire’s Managing Director and CEO, Mr Karl Simich, said the award of the Mining Licence represented a major milestone that would see a significant increase in construction and development activities on site.

“We are absolutely delighted to now be in a position to move to full-scale construction at Motheo, with our construction crews expected to mobilise to site over the next few days. I would like to thank the Government of Botswana for their support throughout the approvals process, which will see Motheo come on-stream in 2023 as one of very few new copper mines commencing production globally.”

Simich said the project is expected to generate approximately 1,000 jobs during construction and 600 full-time jobs during operations, and represents the foundation for Sandfire’s long-term growth plans in Botswana.

“Our vision is that Motheo will form the centre of a new, long-life copper production hub in in the central portion of the world-class Kalahari Copper Belt, where we hold an extensive ground-holding spanning Botswana and Namibia,” he said.

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