According to the World Bank Africa Report, Pulse, growth in Sub-Saharan Africa is forecast to pick up to 2.6 percent in 2017, rising to 3.2 percent in 2018 and 3.5 percent in 2019. The turnaround is predicated on the projected rise in commodity prices and policy actions to tackle still-large macroeconomic imbalances in several countries.
The report states that the forecasts are weaker than those in October, reï¬‚ecting a more moderate recovery among metals exporters and a muted recovery in growth in South Africa. Non-resource-intensive countries are expected to continue to expand at a solid pace. Overall, growth is projected to rise only slightly above population growth, a pace that is largely insuï¬ƒcient for creating employment and supporting poverty reduction eï¬€orts in the region.
“Growth in South Africa is projected to recover to around 0.6 percent in 2017, rising to 1.1 percent in 2018 and 2 percent in 2019. Weaker growth of private consumption and investment is expected to oï¬€set a rebound in net to oï¬€set a rebound in net exports, as the sovereign rating downgrade to sub-investment level raises borrowing costs. For Nigeria, growth is projected to rise from 1.2 percent in 2017 to 2.5 percent in (2018-19),”reads the report.
The Pulse further states: The modest turnaround will be underpinned by a gradual rebound in oil production and an increase in ï¬scal spending. In Angola, growth is projected to increase from 1.2 percent in 2017 to 1.5 percent in 2019, spurred by a modest increase in oil production. In Nigeria and Angola, recovery in the non-oil sector will be constrained by foreign exchange restrictions and high inï¬‚ation. The subdued outlook for Angola, Nigeria, and South Africa implies that per capita output will decline in these countries over the forecast horizon.
Growth will be weaker than previously projected in the CEMAC area, as oil production increases at a slower pace than previously projected, due to maturing oil ï¬elds in several countries, and ï¬scal adjustment reduces public investment. In metals exporters, high inï¬‚ation and tight ï¬scal policy will be a greater drag on activity than previously expected in several countries.
Indications are that growth in non-resource-intensive countries should remain robust, based on infrastructure investments, buoyant services sectors, and the recovery of agricultural production. Ethiopia and Tanzania in East Africa, and Côte d’Ivoire and Senegal in WAEMU will expand at a solid pace, although some of these countries may not reach the high growth rates of the recent past. Growth is projected to strengthen in Ghana, as increased oil production boosts exports.
The economic outlook for the region is subject to signiï¬cant downside risks, including the following on the external front: In Sub-Saharan Africa, sovereign bond issuance has become a key ï¬nancing strategy in recent years, as countries have looked to global ï¬nancial markets to facilitate domestic investment. Higher global interest rates could narrow the scope for this ï¬nancing.
Sustained increases in global interest rates could reduce the ability of governments in the region to raise this level of ï¬nance; Weakening of growth in advanced economies or emerging markets could reduce demand for exports, depress commodity prices, and curtail foreign direct investment in mining and infrastructure. Oil and metals exporters are particularly vulnerable to this risk, given their less diversiï¬ed economies;
The change in government in the United States following the elections in November 2016 is not expected to have major eï¬€ects in the region. However, there is a risk that the United States will cut back oï¬ƒcial development assistance. This will hurt the region’s smaller economies and fragile states, which have strong economic ties with the United States.
Risks on the domestic front include the following: In countries where signiï¬cant ï¬scal adjustments are needed, especially in CEMAC countries, failure to implement appropriate policies could weaken macroeconomic stability and slow the recovery; Worsening security, drought conditions, or political uncertainty ahead of key elections pose risks to the outlook for some countries, including Kenya, Nigeria, and South Africa.
The region faces a myriad of challenges to regaining the momentum on growth. Addressing these challenges will require deep reforms to improve institutions for private sector growth, develop local capital markets, improve the quantity and quality of public infrastructure, enhance the eï¬ƒciency of utilities, and strengthen domestic resource mobilization. In this report, we spotlight a few pressing challenges that several African countries are facing: a slowdown in investment, still high trade logistics costs that impede competitiveness and export diversiï¬cation, and rising debt levels.
2016 RECORDED DECELERATION
Economic activity decelerated sharply in Sub-Saharan Africa in 2016 to an estimated 1.3 percent growth, its worst outcome in more than two decades. This low growth rate was driven mainly by unfavourable external developments, with commodity prices remaining low, and diï¬ƒcult domestic conditions.
Angola, Nigeria, and South Africa experienced a marked slowdown in economic activity. A decline in oil production halted economic growth in Angola. In Nigeria, gross domestic product (GDP) contracted by 1.5 percent amid tight liquidity conditions, budget implementation delays, and militant attacks on oil pipelines. Growth in South Africa weakened to 0.3 percent, reï¬‚ecting contractions in the mining and manufacturing sectors and the eï¬€ects of the drought on agriculture. Excluding these three countries, growth in the region was estimated to be 4.1 percent in 2016.
Other oil exporters struggled to cope with a large terms-of-trade shock, as activity contracted sharply. Metals exporters fared relatively better, as they beneï¬tted from the large drop in oil prices. Nonetheless, output levels and investments in the mining sector were also hit hard and budgetary revenues fell. Average growth among the non-resource-intensive countries remained high in 2016, reï¬‚ecting their more diversiï¬ed economies. Growth in these countries was partly supported by scaled-up public infrastructure investment.
Sub-Saharan Africa is seeing a recovery of growth in 2017. Rising commodity prices, strengthening external demand, and the end of the drought in several countries are among the factors contributing to the rebound. Prices of most commodities continued to rise in early 2017, from their lows in early 2016.
The oil price increase in 2017Q1 reflects steady demand growth and the agreement between some OPEC and non-OPEC oil producers to limit output. However, persistently high global oil inventories along with an improved supply outlook by the in the U.S. shale oil sector, impose constraints in the longer term price outlook of oil prices. Metals prices are strengthening, partly reflecting increased demand from China. Meanwhile, above-average rainfalls are boosting agricultural production in countries that were hit by the El Niño–related drought in 2016 (South Africa, Malawi).
Security threats subsided in several countries. In Nigeria, the decline in militants’ attacks on oil pipelines has helped oil production to rebound. The slowdown in Angola, Nigeria, and South Africa—the region’s three largest economies— appears to have bottomed out toward the end of 2016. Nonresource-intensive countries, including those in the West African Economic and Monetary Union (WAEMU), have been expanding at a solid pace.
Several factors are preventing a more rigorous recovery in the region. In Angola and Nigeria, restrictions on access to foreign exchange continue. Although the Central Bank of Nigeria and the National Bank of Angola have recently increased the sales of foreign exchange in the interbank markets, foreign exchange liquidity conditions remain tight, and are holding back activity in the non-oil sectors. The manufacturing and services sectors remain particularly weak in both countries.
In South Africa, policy uncertainty and low business conï¬dence continue to constrain investment. Unemployment remains very high. The recent (April 2017) downgrade of the country’s credit rating to sub-investment level by Standard and Poor’s and Fitch is likely to weigh on the country’s economic prospects. Elsewhere in the region, several oil exporters in the Central African Economic and Monetary Community (CEMAC) are facing diï¬ƒcult economic conditions. The contraction of activity that began in the oil sector in Chad, Equatorial Guinea, and the Republic of Congo has spread to the rest of the economy.
Although the economies of Cameroon and Gabon have not contracted—due in part to their relatively more diversiï¬ed exports—activity has slowed notably and oil production continues to decline. Having delayed the adjustment to lower oil revenues, CEMAC countries are now embarking on ï¬scal tightening to stabilize their economies. In Chad, the ongoing ï¬scal adjustment has entailed signiï¬cant reductions in recurrent and capital expenditures, which weakened domestic demand. Elsewhere, in Mozambique, the recent government default and debt burden are deterring investment.
The drought in East Africa, which reduced agricultural production at the end of 2016, has continued into 2017, adversely aï¬€ecting activity in some countries (for example, Kenya) and contributing to food insecurity in others (Somalia, South Sudan) (Current Account Deficits and Financing The current account balances of oil exporters are improving, helped by the pickup in commodity prices.
Oil exports are rebounding in Nigeria on the back of an uptick in oil production. In metal exporters, the positive impact of an improvement in metals prices is being oï¬€set by a rise in investment related imports. Current account deï¬cits remain high in several non-resource-rich countries (including Rwanda and Uganda). In these countries, capital goods imports have also been strong, reï¬‚ecting ambitious public investment agendas. Capital inï¬‚ows in the region are rebounding from their low level in 2016, which saw foreign direct investment fall and Eurobond issuance decline.
A strengthening of cross-border ï¬‚ows this year should help ï¬nance the still-elevated current account deï¬cits. Gross foreign direct investment in Nigeria edged up in the fourth quarter of 2016, after declining in the ï¬rst three quarters. Nigeria was able to tap the Eurobond market twice at the start of the year, reï¬‚ecting improved investors’ sentiment.
More broadly, in a global environment characterized by low ï¬nancial market volatility and increased investor risk appetite, sovereign spreads have generally narrowed across the region, with the notable exception of Ghana, where spreads rose because of concerns about ï¬scal policy slippages (ï¬gure 1.4). Sovereign spreads widened on South African debt in the wake of recent political developments and credit rating downgrade. Exchange Rates and Inflation The rebound in commodity prices and improved growth prospects in some countries have helped stabilize commodity exporter currencies.
However, with the Nigerian naira and Angolan kwanza remaining ï¬xed against the U.S. dollar, the imbalance in the foreign exchange market remains substantial in both countries. Among metals exporters, the Congolese franc depreciated sharply against the U.S. dollar in the second half of 2016, with weakness continuing in 2017, reï¬‚ecting heightened political uncertainty as well as loss of foreign reserves in the Democratic Republic of Congo. A debt crisis in Mozambique sharply lowered the value of the metical against the U.S. dollar in the second half of 2016, and the currency remains weak. Annex 1B explores foreign exchange market pressures in Sub-Saharan Africa.
Inï¬‚ation in the region is gradually decelerating from its high level in 2016, but remains elevated. Although a process of disinï¬‚ation has started in Angola and Nigeria, inï¬‚ation in both countries remains high, driven by a highly depreciated parallel market exchange rate. Inï¬‚ation eased in metals exporters, because of greater currency stability and lower food prices due to improved weather conditions (Namibia, Zambia). In Mozambique, inï¬‚ation was in high double digits in February.
In nonresource-intensive countries, inï¬‚ationary pressures have picked up in East Africa, as the drought led to an increase in food prices—notably in Kenya. However, in countries where the drought has been less severe, inï¬‚ation has remained within the central banks’ targets. Inï¬‚ation continues to be low in most CEMAC and WAEMU countries, reï¬‚ecting the stable peg to the euro. The low inï¬‚ation environment in Tanzania, Uganda, and Zambia allowed their central banks to cut interest rates at the start of the year. Bank of Ghana also cut its policy rate. Although inï¬‚ation in Ghana remains in double digits, it has narrowed from over 19 percent in 2016, to around 13 percent in January.
Fiscal Positions Countries across the region face the need for ï¬scal consolidation to narrow ï¬scal deï¬cits and stabilize government debt. Although commodity prices have recovered some ground, commodity exporters (especially oil exporters, such as Angola and Equatorial Guinea) are still running sizable ï¬scal deï¬cits. The ï¬scal balances of non-resource-intensive countries worsened in 2016, reï¬‚ecting elevated investment spending levels.
Widening ï¬scal deï¬cits and, in some cases, sizable exchange rate depreciations have resulted in rising public debt levels in the region. Large non-concessional borrowing for infrastructure development has led to high debt servicing costs in several countries. South Africa’s 2017/18 budget reaï¬ƒrms the government’s commitment to ï¬scal consolidation, with the introduction of a new personal income tax bracket to mobilize additional revenue. It remains to be seen whether the stance of ï¬scal policy will be aï¬€ected by political developments.
Among oil exporters, Angola’s 2017 budget targets a stable ï¬scal deï¬cit, but the risks of large expenditure overruns in the run-up to the election this year remain high. In Nigeria, the government plans to increase infrastructure spending, ï¬nanced in part through borrowing. Elsewhere, Ghana’s 2017 budget signaled a slowdown in ï¬scal consolidation, which could increase ï¬scal risks, given limited ï¬scal space. Mozambique’s budget points to a moderate increase in spending. Reï¬‚ecting the continued weakness of ï¬scal balances, caused by the fall in commodity prices and the continued upward trend in government debt, the region’s rating outlook in 2017 remains negative.
Banking sector vulnerabilities remain elevated in the region, including in Angola, CEMAC countries, the Democratic Republic of Congo, and Nigeria. Foreign exchange restrictions, policy uncertainty, and weak growth have aï¬€ected the soundness of the banking sector. Non-performing loans have increased, and proï¬tability and capital buï¬€ers have decreased. Several proactive measures have been introduced to contain risks to ï¬nancial stability, including through increased provisioning and by intensifying the monitoring and supervision of banks. While banking system resilience needs to be strengthened, steps by banks to limit credit risks, by tightening lending standards and reducing credit to the private sector while continuing to invest in government securities, are contributing to the slow recovery in economic activity.
Botswana Stock Exchange (BSE) moved swiftly this week to suspend BBS Limited from trading its securities following a brawl between Board of Directors and Managing Director, Pius Molefe, which led to corporate governance crisis at the organisation.
In an interesting series of events that unfolded this week, incumbent board Chairperson, Pelani Siwawa-Ndai moved to expel Molefe together with board Secretary, Sipho Showa, who also doubles up as Head of Marketing and Communications. It is reported that Siwawa-Ndai in her capacity as the board Chairperson wrote letters of dismissals to Molefe and Showa.
Following receipt of letters, the duo sought and was furnished with legal opinion from Armstrong Attorneys advising them that their dismissals were unlawful hence they were told to continue to report to work and carry out their duties.
Documents seen by BusinessPost articulate that in the meeting which was held on the 1st of April, the five outgoing board members, unlawfully took resolutions to extend their contracts by a further 90 days after April 30 2021 as they face tough competition from five other candidates who had expressed interest to run for the elections.
Moreover, at the said meeting, management explained that neither management nor the board have the authority to decline nominations submitted by shareholders or the interested parties which is in line with Companies Act and also BBS Limited constitution.
Molefe also revealed that as management they cautioned the board that it was conflicted and it would be improper for it to influence the election process as it seems they intended to do so. “Nonetheless, in a totally unprecedented move in the history of BBSL, the board then collectively passed the unlawful resolutions below. Leading to the illegitimate decisions, the board had brazenly directed that its discussions on the Board elections should not be recorded totally violating sound corporate governance,” reads the statement released by management this week.
When giving their legal advice, Armstrong Attorneys noted that notice for the AGM should state individuals proposed to be elected to the board and directors have no legal authority to prevent the process.
Armstrong Attorneys also noted that, “due process” cited by board members are simply to ensure that the five retiring Directors avoid competition from interested candidates to be appointed to the BBS Limited board. The law firm further opined that the resolution of the 90 day extension of term of the five directors pending re-election or election was unlawful.
Molefe expressed with regret that BBS has been suspended from trading by BSE until the current matter has been resolved. “I am concerned by this development and other potentially harmful actions on the business. As management, we are engaging with stakeholders to mitigate any negative impact on BBS Limited,” expressed a distressed Molefe.
He assured shareholders and the rest of Management that they are working very hard to ensure that the issues are being dealt with in a mature manner. BBS which hopes to become the first indigenous commercial bank has seen its shares halted barely four months after BSE lifted the trading suspension of shares for BBS following submission of their published 2019 audited financial statements.
According to Chief Executive Officer (CEO) of the local bourse, Thapelo Tsheole said the halting of shares of BBSL is to maintain fair, efficient and orderly securities trading environment. “The securities have been suspended to allow BBS to provide clarity to the market concerning the recent allegations which have been brought to the attention of the BSE relating to the company’s Board of Directors and senior management,” said Tsheole.
Meanwhile in their audited financial statements for the year ended 31 December 2020, BBS recorded a loss of P14.6 million as at 31 December 2020 compared to the loss of P35.7 million for the comparative year ended 31 December 2019. According to Molefe the year under review was the most challenging for the bank, its shareholders and customers endured the difficult economic environment and the negative impact of the coronavirus.
He revealed that as the bank, they were forced to put in place several measures to ensure that the business withstands the impact of coronavirus and also to cushion mortgage customers from the effects of the pandemic. “Since April 2020 up to the end of December 2020, BBS assisted 555 mortgage customers with a payment holiday,’’ he said.
This is the bank whose total balance sheet declined by 12 percent from P4, 626 billion for the year ended. 31 December 2019 to P4, 088 billion as at 31 December 2020. As if things were not bad enough, total savings and deposits at the bank declined by 14 percent from a balance of P2, 885 billion as at 31 December 2019 to P2, 494 billion as at 31 December 2020.
On a much brighter side, BBSL mortgage loans and advances improved from P3, 401 billion to P3.408 billion with impairment allowance significantly improving to P78, 648 million from P102, 532 million for the year under review, representing a positive variance of 23 percent. BBS maintained a strong capital base with capital adequacy ratios of 26.32% for the year ended 31 December 2020.
Molefe was optimistic and anticipated a positive outcome during the implementation of the new BBS corporate strategy, whose main drive is commercialization of operations, which is in full force. “It will be spurred on by the positive results we have achieved for the year ended 31 December 2020, and our planned submission of our banking license application to Bank of Botswana which we anticipate to operate as a commercial bank in the third quarter of 2021,” he alluded.
Chief Executive Officer (CEO) of Premium Nickel Resources Botswana (PNRB), Montwedi Mphathi, has said his company will resuscitate the formerly owned BCL assets and deliver a new, sustainable and cutting edge mining operation.
The new mine which will leverage on modern and next generation technology, will be environmentally sensitive and cognisant of the needs of its people and that of the communities around the area of influence.
In a statement last week, Premium Nickel Resources Botswana and its parent company, the Canadian headquartered Premium Nickel Resources announced that they have now completed the Exclusivity Memorandum of Understanding (MOU) with the Liquidator.
The MOU will govern a six-month exclusivity period to complete its due diligence and related purchase agreements on the Botswana nickel-copper-cobalt (Ni-Cu-Co) assets formerly operated by BCL Limited (BCL), that are currently in liquidation.
On February 10, 2021, Lefoko Moagi, the Minister of Mineral Resources, Green Technology and Energy Security of Botswana, affirmed in Parliament a press release by the Liquidator for the BCL Group of Companies, stating that PNR was selected as the preferred bidder to acquire assets formerly owned by BCL.
“This is encouraging for the company and for Botswana. Our ambition in this new project dubbed “Tsholofelo” is to redevelop the former BCL assets into a modern, environmentally sensitive, efficient NI-Cu-Co-water producer where sustainability and the people are at the forefront of the decisions we make,” said Mphathi in a statement last Thursday.
“We also understand that no matter how successful we are at building the “New BCL” , our success will only be measured at our ability to create local wealth , skills and support the continued transition of local economy to a longer term sustainable base.”
The next step during the exclusivity period will be the completion of the definitive agreement. Simultaneous to this the PNRB will be conducting additional investigative work on site to further its understanding of the potential of these assets.
Specifically the company will complete an environmental assessment, a metallurgical study, a review of legal and social responsibilities, a review of the mine closure and rehabilitation plans and an on-site inspection of the legacy mining infrastructure and equipment that has been under care and maintenance.
Mphathi said they continue to monitor the global Covid-19 developments noting that they are committed to working with health and safety authorities as a priority and in full respect of all government and local Covid-19 protocol requirements. PNRB has developed Covid-19 travel, living and working protocols in anticipation of moving forward to on site due diligence.
“We will integrate these protocols with the currently applicable protocols of Ministry of Health & Wellness as well as District Health Management Team ( DHMT) and surrounding communities,” reads a statement released by the Gaborone based Premium Nickel Resources team.
PNRB is looking to become a catalyst in participating and building a strong economy for Botswana, with a purpose where respect and trust are core to every single step that will be taken. “Our success will mean following international best-in-class practices for the protection of Botswana’s environment and the focus on its people, building partnerships and earning respect, through cooperation and collaboration,” explains PNRB on its website.
“We are committed to Governance through transparent accountability and open communication within our team and with all our stakeholders.” Mphathi, a former BCL Executive, is widely celebrated for achieving unprecedented profitability at the mine during his tenure as General Manager.
The Serowe-born mining guru obtained a Diploma in Mining Technology from Haileybury School of Mines in Canada. He later obtained a B.Eng. Mining degree from the Technical University of Nova Scotia. Mphathi went on to City University in London, UK and obtained a M.Sc. in Industrial and Administrative Sciences.
Before ascending to the top country managerial role of Premium Nickel Resources. Mphathi was General Manager of Botswana Ash (Botash), Southern Africa’s leading salt and soda ash producer. He was at some point linked to Debswana top post, which is still to date not substantively filled following the death of Managing Director, Albert Milton, in August 2019.
With Mphathi out of the race and now leading the rebuilding of his former employer, the top post at De Beers- Botswana joint venture is likely to be filled by current acting Managing Director Lynette Armstrong, a seasoned finance executive with unparalleled experience in the extractive industry.
“We are happy to hear that former General Manager of BCL, Mr Montwedi Mphathi, has a relationship with the new Company that intends to resuscitate the mine, he is an experienced Mining Executive who knows BCL better, we want the mine to be brought back to life so that our people can be employed ” said Dithapelo Keorapetse Member of Parliament for Selibe Phikwe West recently in Parliament.
BCL was liquidated in October 2016 following a series of losses and government bailout occasioned by low Copper prices and allegedly poor Investment decisions and maladministration. Recently PNR CEO, Keith Morrison said his team of seasoned experts both from Canada and Botswana are committed to resuscitate the BCL assets and deliver a high performance mining operation.
“The World, Botswana and the mining industry have changed dramatically since mining first started at the former BCL assets in the early 1970s. The nickel-copper-cobalt resources remaining at these mines are now critical metals, required for the continued development of a decarbonized and electrified global economy,” he said.
Morrison added: “As we move forward, it is our goal to demonstrate the potential economics of re-developing a combination of the former BCL assets to produce Ni-Cu-Co and water in a manner that is inclusive of modern environmental, social and corporate governance responsibilities.”
He explained that to attain this, extensive upgrades to infrastructure will be required with an emphasis on safety, sustainability and the application of new technologies to minimize the environmental impact and total carbon footprint for the new operations.
“Our team remains committed to working with the local communities and all of the stakeholders throughout this period and we encourage anyone with questions or feedback to reach out to us directly,” he noted.
Lucara Diamond Corporation, the Canadian 100% owners of iconic Karowe mine, this week announced the extension of its supply deal with Belgian diamond midstream giant HB Antwerp.
The definitive supply agreement is in respect of all diamonds produced in excess. of 10.8 carats in size from its rare gem producing Karowe diamond mine located in the Boteti district of Botswana. Large, high value diamonds in excess of 10.8 carats in size account for approximately 70% of Lucara’s annual revenue.
Though the Karowe mine has remained fully operational throughout the COVID-19 pandemic, Lucara made a deliberate decision not to tender any of its +10.8 carat inventory after early March 2020 amidst the uncertainty caused by the global crisis.
Under the terms of this novel supply agreement with HB, extended to December 2022, the purchase price paid for each +10.8 carat rough diamond is based on the estimated polished outcome, determined through state of the art scanning and planning technology, with a true up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing.
“Lucara is beginning to see the benefits of this strategy in accessing a broader marketplace and delivering regular cash flow based on final polished sales,” said Lucara CEO, Eira Thomas on Wednesday.
“We believe these early results warrant an extension of the arrangement for at least 24 months to determine if superior pricing and market stability for our large, high-value diamonds can be sustained longer term.”
The Canadian junior miner initiated a supply agreement with HB for large stones from its Botswana Karowe mine in July 2020, after pausing its tenders shortly after the Covid-19 pandemic began. The deal enables Lucara to sell the rough diamonds to HB at a price based on an estimate of the polished outcome, which the companies determine using diamond scanning and planning technology. Once HB sells the goods, it adjusts the price that Lucara receives based on the actual selling price of the polished, minus a fee and manufacturing costs.
The extended supply deal will follow the same payment terms as the initial agreement, and will be in effect through to December 2022. Lucara said in a statement this week that the agreement also provides increased tax revenue and beneficiation opportunities for the government of Botswana, and creates a streamlined supply chain for Karowe’s rough.
“More than a supply agreement, this collaboration structurally embeds a new transparent and sustainable way of working in the diamond-value chain,” said HB CEO, Oded Mansori. “For the first time, different partners of the value chain are fully aligned, sharing data and information throughout the process from mine to consumer.”
Mansori added: “We are truly proud with this innovative and straightforward collaboration that has proven itself through the volatile and uncertain reality of 2020. We are confident to achieve even better results during the term of this new contract and demonstrate the power of a true partnership.”
Lucara, which early this year secured extension of Karowe mining license to 2040, announced over P2.4 billion funding for Karowe underground mining expansion project a fortnight ago. The Vancouver headquartered top large diamond producer says this supply agreement deal extension with HB will bring about regular cash flow for Lucara using polished pricing mechanism. Furthermore, the company says the deal has potential revenue upside, particularly suited for Lucara’s large, exceptional diamonds.
In the main, Botswana will benefit increased tax revenue and additional beneficiation opportunities for the Government and communities around Karowe mine. A streamlined supply chain that achieves alignment between Lucara and HB to maximize the value of each +10.8 carat diamond produced at Karowe.