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Selibe Phikwe could house Botswana Oil Coal Liquefaction Plant

Selibe Phikwe might be considered for the multibillion pula Coal Liquefaction Project (CLP) by Botswana Oil Limited, Acting Minister in the Ministry of Mineral Resources, Green Technology and Energy Security, Nonofo Molefhi had told Parliament.


Minister Molefhi was addressing a question tabled by Member of Parliament for Selibe Phikwe West, Dithapelo Keorapetse, who wanted parliament to be updated on the progress of the much anticipated coal-to-liquids project, what it entails, the current stage of project implementation and timelines as well as projected employment opportunities to be created by the  billion dollar petroleum end product undertaking.


The youthful Selibe Phikwe lawmaker also wanted to know the prospects of Selibe Phikwe being considered for housing the plant as part of the town’s resuscitation and economic recovery undertakings after the sudden demise of BCL mine late last year, which resulted in thousand job losses.


In response, Molefhi who was standing in  for Minister Sadique Kebonang, who was reported to be abroad on BCL acquisition matters, told parliament  that the Ministry of was currently going through proposals from interested petroleum companies from the private sector who put forth expressions to develop a Coal-to-Liquids (CTL) Plant. The plant is expected to convert Botswana ‘s abundant tones of coal to petroleum fluids.


“Mr Speaker, my Ministry is inundated with requests and proposals from the private sector to develop Coal to Liquids plant (CTL) in Botswana together with Botswana Oil Limited (BOL)” Molefhi said, explaining that their interest was to have Botswana Oil Limited as the anchor customer of their petroleum products.


“As you are aware, Botswana imports all her petroleum requirements (approximately 1.2 billion liters per year) from the Republic of South Africa with small quantities coming from Namibia and Mozambique” he noted. It is believed that the development of the CTL plant will go a long way in ensuring that Botswana becomes fuel self-sufficient with further potential of being a net exporter of petroleum products in Southern Africa and the African region.

 

Reports from parliament indicate that the coal to liquids projects require substantial investment; it is estimated that the plant which would meet Botswana’s current annual demand of 1.2 billion of petroleum products could costs between US $ 3 – 4 billion (P40 billion) over a four (4) to five (5) year construction period.


According to Minister Molefhi although the Government recognizes the importance of the project as well as its potential turn around to economic diversification efforts, the Selibe Phikwe East Lawmaker observes that it will however be very expensive for the state to develop the plant alone. “Though this would replace the current importation of approximately one billion liters of petroleum products annually, the expenditure will be too high for Government under the current financial pressures to bear” he said.


Molefhi also added that currently government through the Ministry of Mineral Resources, Green Technology and Energy Security is readying itself for assessment processes in which it will screen and come up with qualified private companies to partner with Botswana Oil Limited: “As things stand, my Ministry has developed a Pre-Qualification criteria which will be used to select companies that can be facilitated in order to realize the project. The Pre-Qualification Notice will be in the media platforms soon” He said.


The Acting Minister noted that the project will be a private sector led investment, with Government’s role limited to being that of facilitator. “Botswana Oil Limited as a company mandated to ensure Botswana‘s petroleum self sufficiency is engaging experts in the field to provide Technical Advisory Services to Botswana Government.” He revealed that currently the project was at concept stage with no detailed studies conducted as yet.


“The project schedule and timelines will become realistic once consultants are on the ground and that of course is being planned for end of this month, the private sector also continues to explore avenues of implementing the project’” Said Molefhi.


PROSPECTS OF THE CTL PLANT BEING SET UP IN PHIKWE


Following the placing of Bamangwato Concessions Limited (BCL) under provisional liquidation, Botswana government has devised economic recovery strategies to revitalize the town and the entire Region which used to be lively before the demise of its economic engine, BCL mine.


Selibe Phikwe West Member of Parliament, Dithapelo Keorapetse wants government and Botswana Oil to facilitate the Coal-to Liquids plant towards being built in Phikwe, a project he explains will make a permanent economic turnaround in the town and the entire SPEDU region. When posing a supplementary question after Minister Molefhi‘s description of the project in parliament last week “Thank you Honourable Minister.

 

I just wanted to find out from you, in light of what you have said about the cost of the project, whether you are working with any multilateral or bilateral development partners in that regard? Also concerning Selibe Phikwe, don’t you think that this is a project in which Selibe Phikwe must be given priority given the recent placement of BCL under provisional liquidation?”


In response however, Minister Molefhi, who is also an MP for Selebi Phikwe East,  noted that the location of the project will depend largely on the feasibility studies by consultants and potential investors. He added that the availability of resources and accessibility of raw materials being coal, will influence the decision of plant location.


 “The location of the CTL plant will be greatly influenced by the availability of raw materials, the distance from the plant will be critical, of course that will also take into consideration lowering of costs of production to ensure that they are manageable. My Ministry through Botswana Oil Company will work closely with the private sector and other sectors of Government to ensure that the project addresses the current challenges and facilitate the investment by the private sector” he explained.


Molefhi stipulated that considering the situation in Selibe Phikwe after closure of BCL mine, the shortlisted investors will have the discretion to decide on the location of the plant, “The consultants will manage the guideline and the framework which has been designed for the selection and the short listing of potential investors.

 

The decision on the location of the plant is a decision to be made by the investors. Taking into account what is also available for Selibe Phikwe as incentive packages, Government would soon be announcing the extent of packages and that is designed to motivate people to consider Selibe Phikwe as an investment zone”.


Since location of the project will also be influenced by the cost benefit analysis, if it is found that locating project in Selibe Phikwe away from where the abundance of the resources are (Palapye), can be accommodated, at that point a decision would be made by the investors and of course they will take into consideration the incentive packages which Government would extend or has decided to extend to Selibe Phikwe as a  Special Economic Zone


When speaking to WeekendPost this past week, Keorapetse added that since structures and mechanism is already in place, which transported coal from Morupule to BCL mine, the same infrastructure can be sourced and used, if the plant is in Selibe Phikwe.
“Since government is somewhat constrained to immediately start the project because of unavailability of resources.

 

The state should amenably engage multilateral and bilateral development partners like it did with projects such as Kazungula Bridge, for instance, for sourcing out resources to immediately start this project and give Selibe Phikwe a priority, especially given that the primary raw material for the project is coal and this coal was used by BCL from Morupule Colliery and it can just be a continuation of the usage of that coal’’ he said


The Acting Minister who is also in this regard Member of Parliament for Selibe Phikwe East told this publication that consultations have been extensive in terms of looking at the scope of the project, its potential and cost of investment and therefore government will be putting up the project to public tender.


“We will be doing so, so that we are able to select the experts who will provide Government with the appropriate advice. On the basis of that, we would then progress the project to the next level where the selected companies would then determine the extent of the investment, at this point in time, it is difficult to give an estimated number of people the project can employ. Like I said, we are still at concept design stage,” Molefhi explained.

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Pan-African risk advisor Minet Group and Botswana’s Africa Lighthouse Capital acquire Aon Botswana

21st May 2021
Pan-African-risk-advisor-Minet-Group-

Strategic partnership offers inherent benefits of global knowledge, African insights, and local expertise and commitment

Minet Group and Africa Lighthouse Capital today announced that they have received regulatory approval and fulfilled all requirements to acquire Aon’s shareholding in Aon Botswana, and consequently will begin the process to rebrand to Minet Botswana.

Minet Group is a well-known and trusted pan-African risk advisory firm and Aon’s largest Global Network Correspondent and has been rapidly expanding its African footprint since 2017 through the acquisition of operations from global professional services firm Aon in Kenya, Lesotho, Malawi, Mozambique, Namibia, Tanzania, Uganda, and Zambia.   Minet has been delivering world class products and services across Africa for over 70 years.

Africa Lighthouse Capital (ALC) is a leading Botswana citizen-owned private equity firm focused on investing in Botswana companies and propelling them into regional champions, with over BWP 500 million in funds under management.

The new entity will be rebranded to Minet and will inherit deeply rooted respect by its clients for their innovative and locally relevant solutions, responsiveness, and efficient processes. Furthermore, it shall have the benefit of consistency in leadership and staffing, with Barnabas Mavuma, previously Managing Director of Aon Botswana, continuing to lead the business as the MD supported by the local management team.

 “The addition of Minet Botswana to our growing African network affirms our belief in the great opportunities for growth that Africa offers, driven by rising consumer demand, huge investment in infrastructure and quick adoption of new technology,” says Joe Onsando, CEO at Minet Group.

“This transaction significantly adds to the diversity and skills base of our team and will have a positive impact on the range of products and services we provide. Our Correspondent agreement with Aon gives us access to global expertise and data driven insights and uniquely positions us to deliver risk advisory solutions that reduce volatility, thus driving improved performance for our clients. This is a very exciting time to be Minet in Africa.”

“The significantly increased Botswana citizen shareholding effected by this transaction gives rise to an exciting era of local market focus and growth for Minet Botswana,” says Bame Pule, Founder and CEO of Africa Lighthouse Capital.  “We intend to work with Minet Botswana’s local management team to further localise the business in terms of product development, while at the same time investing in local skills development and business development.  We look forward to this exciting journey, which will result in a significantly enhanced service offering for Minet Botswana’s clients.”

Consequently, and similar to the other members of the Minet Group, Minet Botswana becomes an Aon Global Network Correspondent, retaining its access to Aon’s resources, technology, and best practises, combined with the benefit of independent, local agility. This transaction furthermore significantly increases local shareholding, enabling operations to become even nimbler and better positioned to unlock new and existing growth opportunities.

Clients of Minet Botswana will experience continuity of product and service delivery standards in the short term. In the near future, they can expect an enhanced offering that combines agility with technology and product innovation, tailormade for their specific needs.

Together, Minet and ALC bring a sound understanding of local market conditions, strong governance, and an established track record in the region. These qualities, combined with Aon’s global capabilities and expertise, will bring clear benefits for clients.

This transaction vastly increases citizen ownership with shareholders who are going to be active in the business. The transfer of equity interests in Botswana to investors with local and regional expertise, presence and commitment will allow the businesses to move quickly in line with market movements, and to introduce products that are tailored to the local market.

“Minet’s commitment and drive to incessantly adapt to changing market conditions, and to innovate to meet the unique insurance demands of the African continent, while maintaining the high standards customers have come to expect – Onsando concludes – will continue to grow and give Minet a powerful competitive edge within the African market”.

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Africa scores $285 Billion IMF deal

21st May 2021
IMF-Managing-Director-Kristalina-Georgieva

French President Emmanuel Macron received 21 Heads of state and government officials from Africa during the recent summit on the Financing of African Economies that focused on Africa to take full advantage of the tectonic shifts in the global economy and the call for a joint effort for financial and vaccination support for the continent.

President Emmanuel Macron stressed that “Most regions of the world are now launching massive post-pandemic recovery plans, using their huge monetary and fiscal instruments. But most African economies suffer the lack of adequate capacities and such instruments to do the same. We cannot afford leaving the African economies behind.

We, the Leaders participating to the Summit, in the presence of international organizations, share the responsibility to act together and fight the great divergence that is happening between countries and within countries.

This requires collective action to build a very substantial financial package, to provide a much-needed economic stimulus as well as the means to invest for a better future. Our ambition is to address immediate financing needs, to strengthen the capacity of African governments to support a strong and sustainable economic recovery and to reinforce the vibrant African private sector, as a long-term growth driver for Africa.”

For her part, International Monetary Fund (IMF) Managing Director Kristalina Georgieva highlighted that “there is urgency to focus on financing Africa. Last year, the pandemic-caused recession shrank the GDP of the Continent by 1.9 percent – the worst performance on record. This year, we project global growth at 6 percent, but only half that 3.2 percent for Africa.” Adding that Africa needs to grow faster than the world at 7 to 10 percent to meet the aspirations of its youthful populations, and become more prosperous and more secure.

Georgieva revealed that the price tag on the shot is estimated to be “$285 billion through 2025. Of this $135 billion is for low-income countries. This is the bare minimum. To do more – to get African nations back on their previous path of catching up with wealthy countries – will cost roughly twice as much. These are large numbers. They may seem out of reach. But to quote Nelson Mandela: impossible until it is done.”

The main areas of interest to achieve this include; first, end the pandemic everywhere, 40 percent of the population of all countries is targeted to get vaccinated by the end of 2021, and at least 60 percent by mid-2022.

Second, bilateral and multilateral development financing grants and concessional loans ought to go up. Over the last year, the IMF have swiftly ramped their financing for the Continent, including providing 13 times their average annual lending to sub-Saharan Africa. And are working to do much more. The IMF has also received support to increase access limits so they can scale up their zero-interest lending capacity through the Poverty Reduction and Growth Trust.

The IMF has also devised exceptional measures. Their membership backs an unprecedented new allocation of Special Drawing Rights (SDR) of $650 billion, by far the largest in their history. Once approved, which is intended to be achieved by the end of August, it will directly and immediately make about $33 billion available to African members. It will boost their reserves and liquidity, without adding to their debt burden.

Over the course of the last year, the IMF has built experience in facilitating the on lending of SDRs – thus managing to triple their concessional lending capacity as a result.

The Third being, actions at home. According to Georgieva “a crisis is an opportunity for transformational domestic reforms that increase domestic revenue, improve public services, and strengthen governance. For instance, digitalization can improve tax administration and revenue collection, and the quality of public spending. And with radical transparency, Africa can tap into new sources of finance – such as carbon offsets.

There is ample scope for countries to encourage private investment, including in social and physical infrastructure. New IMF research, published today, highlights that domestic and international investors could provide at least 3 percent of GDP per year of additional financing by the end of this decade.”

Reforms of international taxation can also support Africa’s growth. For a long time, the IMF has been in favor of minimum corporate tax rates to reduce the race to the bottom and tax avoidance. And they strongly support an international agreement on digital tax, something France has been a leading voice for. It is important to secure fair distribution of tax revenues, so they can contribute to closing Africa’s financial gap.

Georgieva called on to each and every one to step up. Reminding the attendees that from history they are all familiar with what a shock of this magnitude can do if not countered forcefully and effectively.

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Indian COVID-19 variant hits Botswana diamond sales

20th May 2021
Indian-Covid--19-variant-hit-rough-diamonds-sales---De-Beers-

De Beers’ Group, the world’s number one diamond producer by value, this week attributed the downfall of its sales for the fourth cycle week to the second wave of the Covid-19 variant (B.1.617.2) which was first discovered in India.

Diamond trading conditions have been hit by the Covid-19 crisis in India which is a major cutting and polishing centre for the world’s diamond trade.

The outbreak of the new variant has led to a humanitarian crisis with 280, 284 fatalities of the disease reported.

The London headquartered company said the sales in its fourth cycle fell to $380m (about P4.1 billion) down from $450m (about P4.8 billion) in the third cycle though it was higher than the fifth cycles of last year when the group shifted only $56m (P600 million).

De Beers emphasized that they continued to implement a more flexible approach to rough diamond sales during the fourth sales cycle of 2021, with the Sight event extended beyond its normal week-long duration.

The De Beers group Chief Executive Officer (CEO), Bruce Cleaver said the company continues to see robust demand for diamond jewellery in the key US and China consumer markets.

“However, the scale of the second wave of Covid-19 in India, where the majority of the world’s diamonds are cut and polished, has led to reduced midstream capacity and subsequently lower rough diamond demand, during what is already a seasonally slower time of year for midstream purchases,” said Cleaver.

Meanwhile Botswana health officials have confirmed the new Covid-19 variant in Botswana. The Ministry of Health and Wellness -through a press statement- informed members of the public that the variant (B.1.617), was confirmed in Botswana on 13th May 2021.

According to Christopher Nyanga, spokesperson at the Ministry, this followed a case investigation within Greater Gaborone, involving people of Indian origin who arrived in the country on the 24th April 2021.

Moreover the World Health Organization (WHO) recently announced that the Indian Covid-19 variant was a global concern, with some data suggesting that the variant has “increased transmissibility” compared with other strains.

The India variant (B.1.617.2) – is one of four mutated versions of the coronavirus which has been designated as being “of concern” by transitional public health bodies, with others first being identified in Kent, South Africa and Brazil.

Nevertheless when speaking at Bank of America Global Metals and Mining conference, Anglo American Chief Executive Officer, Mark Cutifani said the company portfolio is increasingly tilted towards future enabling products and those that need to decarbonise energy and transport in order to meet consumers’ needs – from home appliances, electronics and infrastructure, to food and luxury goods.

“We see material opportunity for Anglo American to continue to set itself apart in terms of the performance of our diversified business, further enhanced through sector-leading 25% volume growth over the next four years, led by copper and the platinum group metals,” said Cutifani.

“Most importantly, as the supplier of such critical materials, it is the duty of our industry to ensure that in everything we do, we act responsibly and deliver enduring value for our full breadth of stakeholders, including our planet.”

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