MITI pushes for cooperatives transformation
Business
In a bid to unearth communities’ economic potential as well as push citizen economic empowerment, the Ministry of Investment Trade & Industry (MITI) has unleashed a strategy to transform cooperative societies as a key vehicle in the eradication of poverty and job creation.
MITI through its Department for Co-operative Development continues to implement the Co-operative Transformation Strategy, with a view to revamp and resuscitate Co-operatives to become competitive, profitable, viable and sustainable business enterprise.
There are currently 271 Registered Co-operative Societies (financial and non-financial) across the Country employing over 130 people.
The Minister of Investment Trade & Industry, Bogolo Kenewendo underscored the importance of cooperatives societies in her ministry‘s mandate when addressing a series of Kgotla Meetings in Ngamiland recently. She said her ministry continues to develop and implement initiatives geared towards Co-operative Growth, capacity building, diversification and sustainability.
“The Co-operative movement, globally and locally have been urged to commit in the fulfillment of the Millennium Development Goal number one of eradicating extreme poverty and hunger by focusing on revival of the agricultural Co-operatives,” she said.
Generally cooperatives have been the anchor of community development in Botswana even at pre-independence transition. During the post colonial epoch, cooperatives and community syndicate business models became the pillar of Botswana’s economic growth especially in the areas of Agriculture.
However as modern means of economic survival took shape the concept of cooperatives hit diminishing trends. It is only of late that the government of Botswana decided to take deliberate action towards revitalization cooperative societies and community business models into significant economic role players. Early this year local cooperative societies began a process to build a centralized digital database of their operations to reduce setbacks and financial losses.
The initial processes of the system development, dubbed, “All Cooperatives Management Information Solution (CoopMIS),” are already underway with the project expected to start soon. Kenewendo said that cooperatives needed to embrace good governance, business acumen mentality and robust winning strategies for their success. “The cooperative sector shows growth, not only in number, but in value as well. This is demonstrated by the level of investment, employment created and the benefits to the membership,” she said
Cooperative movement around the world is increasingly being promoted by international development organizations as a means to enhancing participatory and inclusive development. This is a result of the participatory nature of cooperatives that embrace communities’ investment that promotes multiple growth opportunities. Besides providing means for economic growth, cooperatives also provide an opportunity for empowerment of local communities, socially and economically. Financial cooperatives such as Savings and Credit Co-operative Society (SACCOS) are also very pivotal in today‘s economic growth and diversification quest.
Observers note that as Botswana seeks to divert from mineral sector dependence and develop other economic sectors for sustainable growth and consequently realize improved lives for its citizenry especially the local communities and furfural settlers financial cooperatives were key in that quest .
The entire financial sector plays a crucial role realizing this, specifically in resource mobilization and raising capital for investment and development of other sectors such as property & real estate, agriculture, manufacturing, tourism and hospitality. Apart from the banking sector which is fragile and vulnerable to economic uncertainties the financial sector is significantly boosted by the pension funds, capital and asserts management industry with Botswana’s largest fund, BPOPF playing a major role and taking the lead in wealth accumulation.
THE SACCOS MODEL
Of recent Savings and Credit Co-operative Society (SACCOS) movement has also been establishing itself as significant segment of the non-banking financial sector. SACCOS is a self-help and self-reliant democratically member-driven financial co-operative, owned, governed and managed by members with a common bond or common economic need.
It is a very integral wealth accumulation tool that can boost the financial sector in funding developmental undertakings like infrastructure, capacity building & human resources development, research & innovation and consequently birth economic growth as well as the much needed diversification.
Mr Boniface Tsheko Deputy Director in the Department of Co-operative Development under the Ministry of Investment Trade & Industry (MITI) describes SACCOS as a non banking financial institutions set up by people who want to solve a common problem for themselves and is managed by themselves.
This may include people working for the same employer, belonging to the same labour union, social fraternity, or living in the same community. The SADC region has over 6 000 registered SACCOS with a total membership of 1.6 million and an asset base of over US$823 million.
Of this, the contribution of Botswana to the stated statistics is 64 registered SACCOS while membership is over 25 000 and an asset base of over US$9 million. SACCO’s members agree to pool their resources together and grant loans to one another at reasonable rates.
This model allows members to benefit from higher returns on savings, lower interest rates on loans and low bank and finance charges on average. SACCOS helps members create opportunities such as starting small businesses, growing farms, building family homes and educating their children and other domestic needs, without unending state of dependency.
Under informal and non registered operations ordinary Batswana gather up funds and lend money amongst themselves on interest basis to expand the fund and later split after an agreed period of time. This financial syndicate model popularly known as ‘’Motshelo’’ is unregulated but gathers Batswana especially low income earners significant capital for their household requisite and small business. Motshelo has established itself as a form of cooperative financial platform key to resources and funds mobilization for Batswana.
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.
Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.
To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.
The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.
The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.
Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.
The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.
The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.
In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.
MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.
MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.
Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.
With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.
The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.
MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.
In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.
Business
BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.