Base metals to add silver lining to mining industry
It appears there is light at end of the tunnel in the mining sector (base metals) as Botswana moves to dilute the dominance of the traditional diamond subsector. Mining is Botswana’s largest sector by revenue generation and the country’s largest private employer.
In the 2017/18 financial year Government collected over 17 billion pula from royalties and dividends while by March 2018 over 16 000 people were employed in the mining industry. The sector will remain the country’s economic anchor for more decades to come amid the economic diversification wave. This is because the mining sector is currently moving rigorously to diversity within itself as much as the nation is on an accelerated move to diversify economic activities away from mining.
Since the beginning of diamonds mining in the 1970s, the multibillion pula sector has been dominating mineral contribution to the country’s economy. The country has learnt it the hard way when over 10 000 direct and indirect jobs were lost in the copper mining industry from 2012 until 2016. But there is hope, experts this week pointed to the potential of the non-diamond mining industry at the annual Botswana Resource Sector Conference held in Gaborone.
The conference brought together leading mining and resources companies doing prospecting and exploration for different mineral deposits in Botswana. It emerged at the gathering that Botswana sits on a vast of economical mineralization and most valuable high grade deposits in the world. Apart from the traditional Copper-Nickel and Coal which has been complementing the lucrative diamonds sector for some years, it was also revealed that Botswana soils are also covering reserves of some of the most valuable industrial minerals.
These include among others Lead, Zinc, silver, vanadium and manganese deposits which exploration experts classify as some of the world‘s high grade reserves. When laying the foundation at the highly technical conference, Botswana Chamber of Mines Chief Executive Officer, Charles Siwawa noted that it was indeed not even over yet for controversial industries like the copper-nickel which faced a halt 2 years back due to predominantly depreciation of global commodity prices. Botswana‘s largest copper and nickel mining group BCL limited liquidated late 2016 following a series of closures of other copper mining companies.
Siwawa, an internationally recognized and seasoned mining expert told attendants at the conference that in the near future Botswana will bounce back and be recognized with the likes of DRC s and Zambias of the global copper mining industry. Meanwhile Charles Siwawa of Botswana Chamber of Mines Chief expressed that in the near future the world would look to Botswana not just for the lucrative diamonds but also for these valuable metal minerals which are mostly used for industrial purposes .
“While copper mines which initially closed due to liquidation are opening because of commodity price re-bounce, no one should undermine these aforementioned base metal deposits , these are world class reserves , your lead , Zinc and Silver , they are Botswana ‘s future of Mining industry,” he said . Siwawa noted that these metals mineralization exists in high grade deposits that would compete very well in the market for industrial uptake in global factories and heavy processing & hardware manufacturing plants.
Commenting on Siwawa’s views, Khemacau Copper Project Engineer and Country Manager, Jahannes Tsimako noted that his company was in good progress to unearth one of the valuable copper deposits in the region. Khoemacau is one of the companies exploring and moving to mine copper and other base metals in the Kalahari Copper Belt with one of their major mines being the Bosetu Mine, the company acquired the mine from Discovery Copper Botswana at a tune of $34.5 m (P343million) after the mine collapsed in 2013.
In 2016 Khoemacau was granted a mining license with Botswana Government retaining its 15 % participating interest in the Mine. Khoemacau started constructing the underground mine in March 2016. Boseto Mine is located in northwest of the country between Ghanzi, 70 km southwest of Maun. The mine is expected to produce copper and silver, on full scale operation hiring an excess of 2000 direct and indirect employees. Tsimako revealed that his company expects to mine sellable copper by first quarter of 2020.
Another major undertaking in the Kalahari Copper Belt is advanced explorations by Tshukudu Metals a subsidiary of Metal Tiger, the latter is one of the world’s reputable companies in the area of mining base metals. Kebalemogile Tau, Explorations Manager at the Ghandzi Based Tshukudu Metals enticed attendants and spoke life to the country’s future in Mining. The company is also at advanced explorations of the copper in the Kalahari belt.
Tau underscored that Botswana had a great future in Base metal mining. “The Kalahari Copper belt will give us long profitable mines with life span of 20-30 years employing thousands of our skilled and non-skilled personnel,” he said. Nigel Forrester, Chief Executive Officer of Mount Burgess Mining also revealed that his company was also on the final stages in prospecting Zinc Lead and Silver as well as Vanadium mineralization at its Kihabe reserves whose deposits spill over into Namibia. Forrester explained that his company explorations will output one of the world valuable lead and Silver mineralization.
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Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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