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Botswana courts Dubai business community

In a bid to woo the international business community and attract global capital to Botswana, Ministry of Investment, Trade & Industry (MITI), Botswana Investment & Trade Centre (BITC) in collaboration with the Embassy of Botswana in Kuwait undertook a targeted investment and trade promotion mission to the United Arab Emirates from the 12th –15th March 2018.

The Botswana delegation was lead by Minister of Investment Trade & Industry Vincent Seretse. According to BITC the rationale of this undertaking was that the United Arab Emirates has over the years successfully transformed its economic landscape and positioned itself as the economic centre of the Middle East, having attracted multiple investments into the region.

BITC Director of Corporate Communication Kutlo Moagi told WeekendPost that over the next decade the UAE is expected to be one of Middle East's economic outperformers. “Its diversified economy and solid operational framework will see exports and investment continue to drive its growth.” Moagi said, adding that the UAE therefore presents potential for Botswana to attract foreign direct investment and take advantage of opportunities for joint venture partnerships and strategic alliances.  


She further explained that the main objective of the mission was to explore investment and trade opportunities, position Botswana as an investment destination of choice to the UAE business community, as well as facilitate for possible joint-venture arrangements between interested investors from both countries. Moagi also revealed to this publication that a total delegation of 17 private companies and government institutions with sectors of focus in Agriculture, Manufacturing, Mining, International Financial Services (IFSC), Tourism and Transport and Logistics embarked on the trip to Dubai.

“Engagements with the UAE business community were carried out through a Business Conference in partnership with the UAE Ministry of Economy and Dubai Chamber of Commerce and Industry. In addition, a series of pre-planned business to business meetings in both Dubai and Abu Dhabi took  place for participating companies to explore opportunities for mutually beneficial partnerships with their counterparts in the UAE,”  she said.

When delivering a key note address at the Business Conference Botswana Minister Seretse  said  Botswana stands to learn a lot from the United Arab Emirates, especially in the area of sustainable economic diversification.“We wish to learn how you have successfully managed to diversify your economy, by creating other thriving strategic sectors such as: Tourism, Financial and Business Services, Transport and Logistics, as well as Manufacturing, to name but a few. I have noted the firm resolves of the United Arab Emirates to have 64% of your GDP being derived from non-oil reserves by the year 2030,” Minister Seretse told the business conference.

He also added that given the negative trade balance in favour of Botswana, there were a lot of opportunities for the UAE to export more goods and services to Botswana. He that Botswana currently exported goods worth US$708 million per annum to the United Arab Emirates, mostly diamonds, while the United Arab Emirates exports US$21 million of diamonds and other consumables to Botswana. He encouraged the Arabs to consider locating a production facility in Botswana providing access to multiple preferential trade arrangements, such as the SADC-EU Economic Partnership Agreement, the Africa Growth and Opportunities Act (AGOA), the Southern Africa Customs Union (SACU), and Southern African Development Community (SADC).   

“We seek stronger strategic and commercial partnerships with a nation that has successfully moved from humble beginnings to become the globally recognized economic powerhouse that the United Arab Emirates clearly is today.  Beyond the partnerships, we are keen to see actual investments happening across our two nations.”


Seretse called on United Arab Emirates Investors to collaborate with Botswana companies in the area of manufacturing and services, including ICT, transport & logistics particularly aviation and pharmaceuticals among others. He cited Botswana’s beef industry saying the country already meets the agriculture stringent requirements of the European Union market and that it was compelling for Botswana to explore selling beef and livestock development solutions to the United Arab Emirates.   

The minister further promoted the country’s tourist sites, “In the area of tourism, I wish to invite you to Botswana’s UNESSCO listed world heritage sites, the pristine Okavango Delta, and the mystical Tsodilo Hills. Botswana with its diversified tourism offering, presents extensive opportunities for tourists, investors and tour operators in the United Arab Emirates to visit, invest, and explore the peace and tranquillity prevailing in the Botswana environment.”

For his part, Vice President of the Dubai Chamber of Commerce and Industry Hassan Al Hashemi underscored that Botswana offered plenty of attractive trade and investment opportunities in a variety of economic sectors. “The country has the potential to leverage its position in the region to serve as a gateway to the southern African market,” he said adding that Botswana has taken a proactive approach to diversifying its economy beyond commodities and attracting foreign direct investment.  

He shared that over the last five years, non-oil trade between Dubai and Botswana has nearly tripled to exceed $1 billion in the first nine months of 2017. Bilateral non-oil trade is currently dominated by pearls, precious/semi-precious stones and metals, valued at around $1 billion, followed by machinery and electrical equipment at $6 million, and transport equipment at $1.3 million.

“As one of the world’s largest producers and exporters of diamonds, Botswana can greatly benefit from strengthening its cooperation with the UAE, which has become a major re-export hub for diamonds. In fact, $10 billion worth of diamonds were re-exported through the UAE in the first half of 2017; accounting for 12% of the country’s total re-exports.  Yet, we see huge potential to expand the scope of bilateral trade and investment to other key sectors such as tourism, agriculture, healthcare, manufacturing and ICT,” said Al Hashemi.

He said that companies in Botswana can leverage on the UAE’s strategic geographical position between Africa, Asia and Europe, to attract new visitors.  “These are all advantages that can help us build on existing ties and take our trade relations to the next level.” He said that Dubai’s strong trade relationship with Botswana was symbolic of Dubai’s strategy of reaching out to promising markets of the world.

Al Hashemi said his organization was committed to protecting the interests of Dubai’s business community and providing all facilities and resources to ensure that that the emirate’s ties with Botswana continue to strengthen and develop. Keletsositse Olebile, the Acting CEO for Botswana Investment and Trade Centre said Botswana was finalizing the implementation of the enablers for investment such as double taxation avoidance both UAE companies in Botswana adding that UAE citizens going into Botswana were not required a Visa.

Olebile noted that a reciprocal arrangement by the UAE was being put in place to allow Botswana Citizens to access UAE without Visa requirements. Botswana Development Corporation Chief Executive Officer Bashi Gaetsaloe and SPEDU Head Dr Makubung Mokubung also presented on existing partnerships and investment opportunities facilitated by their respective organizations.

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Business

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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Business

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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