DTCB looks to process non-De Beers stones
Diamond Trading Company Botswana (DTCB) is looking into the possibility of taking diamonds from non-De Beers mines for sorting and valuing. This was revealed by DTCB Managing Director, Mr Tobake Kobedi on Wednesday.
Speaking to the concept of more capacity to take more work from other customers, the Managing Director reiterated that as an organization DTCB desires not to only be limited to receiving Debswana Diamonds. “Currently our shareholder agreement as mandated by our establishment we sort diamonds from De Beers mines in Botswana only, but we want to make propositions to our shareholders context of building a legacy for Botswana that shall exist beyond diamond depletion, that look we have to be at the base and host of the entire value chain as a country because we recover the most valuable stones from our local pits,” said Kobedi.
He said DTCB plant capacity can sort and value over 33 million carats of Diamond in 12 months but currently only receiving 22 million carats from Debswana mines. “Why can’t we take rough diamonds from Lucara, Ghagoo and other mines? Currently the resuscitation of Zimbabwe speaks possibilities of new diamond discoveries, why can’t we ready ourselves to propose intake from them and other mines in the region?” Kobedi posed these questions explaining the intention of DTCB strategy 2020 and its vision towards to ensuring that Botswana remains a Diamond Hub beyond depletion of the stones.
According to Kobedi positioning DTCB as a world class organisation was a pivotal conversation for the future of Botswana, he said it was imperative for Botswana to think beyond diamonds. “Diamonds are not finite and currently the discovered ore combined with tailings will take us just beyond 2050,” he said.
“What will happened after that? We need to start training our people in different disciplines of the diamond industry ,polishing , sales and so forth and build facilities and capacity that shall translate into Botswana being the Diamond hub of the world , and DTCB has a role to play here , for us as a country to start thinking of jewellery manufacturing and retail DTCB has to have volumes of diamonds sorted and valued here from mines worldwide hence our quest as inclined in this strategy , this is a starting point for a revolution that will birth Botswana into a Diamond country with huge stake in the whole value chain and diamond pipeline subsequently the much needed economic transformation.”
Kobedi said his company desires to improve its performance and delivery to customers. He indicated that through the Strategy 2020, DTCB was re-aligning itself as a processing organisation with resultant impacts on processes, structures, systems and culture.
“When we commenced this realignment we had to part ways with about 75 of our employees not because there were ineffective and incompetent but because our business remodelling dictated that some of the duties were redundant and over lapping hence the retrenchments,” he explained.
By 2020 when a new sales agreement is penned down, DTCB intends to have improved its efficiencies and effectiveness as a rough diamond sorting and valuing operation. “We are creating a flexible and agile organisation, capable to respond to market needs and this in the context of transforming DTCB into an operationally excellent processing organisation as well as position DTCB to have capacity to take on more work for other customers,” Kobedi said.
Joseph Ithobogeng, DTCB Chief Operations Officer shared that by 2020 DTCB intends to have attained recognition as a world-class processing organisation, be a more reliable, with repeatable and consistent delivery to customers as well as reduced pipeline and increased market flexibility and responsiveness. “We will have reduced rework through efficient quality systems, reduced business risk and increased customer confidence in meeting sales deadlines by 2020,” he said.
Further deliberating on this the DTCB Management observed that to be a world class processing organisation that can take rough diamonds from diversified clientele out of De Beers recovery mines portfolio, increased cost efficiency with streamlined structures and stock holding costs cannot be over emphasized.
“We are building a capable, motivated workforce with high productivity levels and optimised capacity to enable new opportunities, we are half way into this 5 year strategy, launched in 2015 and we are confident by 2020 we will be able to submit and propose to our shareholder that we are ready for exploration of new opportunities to broaden our clientele in the rough diamond value chain and pipeline.”
DTCB recently commissioned state of the art Diamond Cleaning Plant, a laboratory of sophisticated chemical processes of quantum physics operations and complex scientific techniques of cleansing, valuing and sorting stones of intricate mineralogical occurrences that diamonds are. The plant is far much enhanced from precious facility housed in Jwaneng. DTCB is a 50-50 venture between Botswana Government and De Beers, the company avails 85 % of their sorted and valued diamonds to De Beers Sight holder Sales and 15 % to Okavango Diamonds which is wholly owned by Botswana Government.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.