‘Growing inequality undermines fight against poverty’
Business
Oxfam, the international charity organisation, has warned in their latest report that growing inequality if left unchecked threatens to pull societies apart and undermines the fight to end poverty.
The report “An Economy for the 99%” was released on Monday, a day before world leaders convene at Davos for the annual World Economic Forum where issues of inequality are expected to take centre stage. Oxfam said new data from its report shows that total global wealth has reached a staggering $255 trillion. Since 2015, more than half of this wealth has been in the hands of the richest 1% of people. At the very top, this year’s data finds that collectively the richest eight individuals have a net wealth of $426 billion, which is the same as the net wealth of the bottom half of humanity.
The report describes how wealth continues to accumulate for the wealthy, and how capital owners have consistently seen their returns outstrip economic growth over the past three decades. Oxfam’s previous reports have shown how this extreme and growing wealth in the hands of a few translates to power and undue influence over policies and institutions.
In a press release summarizing the report, Oxfam outlined how the inequality crisis is being fuelled by companies whose business models are increasingly focused on delivering ever-higher returns to wealthy owners and top executives. Companies are structured to dodge taxes, drive down workers' wages and squeeze producers instead of fairly contributing to an economy that benefits everyone.
Mark Goldring, Oxfam GB Chief Executive, said: "This year's snapshot of inequality is clearer, more accurate and more shocking than ever before. It is beyond grotesque that a group of men who could easily fit in a single golf buggy own more than the poorest half of humanity.
"While one in nine people on the planet will go to bed hungry tonight a small handful of billionaires have so much wealth they would need several lifetimes to spend it. The fact that a super-rich elite are able to prosper at the expense of the rest of us at home and overseas shows how warped our economy has become.
"Inequality is not only keeping millions of people trapped in poverty, it is fracturing our societies and poisoning our politics. It's just not right that top executives take home massive bonuses while workers' wages are stagnating or that multinationals and millionaires dodge taxes while public services are being cut."
The report states that many people experiencing poverty around the world are seeing an erosion of their main source of wealth–namely land, natural resources and homes –as a consequence of insecure land rights, land grabbing, land fragmentation and erosion, climate change, urban eviction and forced displacement.
Oxfam says while hundreds of millions of people have been lifted out of poverty in recent decades, one in nine people still go to bed hungry and had growth been pro-poor between 1990 and 2010, 700 million more people, most of them women, would have escaped poverty over this period.
The report describes how life for the world's poorest people remains brutally hard. The incomes of the poorest 10% of people increased by $65 between 1988 and 2011, equivalent to less than $3 extra a year, while the incomes of the richest 1% increased 182 times as much, by $11,800. Oxfam’s research has revealed that over the last 25 years, the top 1% has gained more income than the bottom 50% put together, and almost half (46%) of total income growth went to the richest 10%
“This is important because the poorest 10% of the global population still live below the extreme poverty line of $1.90 a day, and the World Bank has projected that with the current income distribution we will fail to meet the global target to eradicate poverty by 2030. Even this is a modest ambition, as the national poverty lines of countries themselves is in fact above $1.90 a day. Closer to three billion people, or half the global population, live below the “ethical poverty line”, calculated as the amount per day that would enable people to achieve a normal life expectancy of just over 70 years,” the report said.
According to the report, the rise in wage gap and the decline in workers collective bargain have colluded to accelerate inequality particularly in developing countries. The report notes that within the labour share, wage disparities have been growing. Wages in low-skill sectors in particular have been falling behind productivity in emerging economies and stagnating in many rich countries, while wages at the top continue to grow.
Moreover, in many developing countries where wage disparities are growing, the pay gap between workers with different skills and education levels is a key driver of inequality. Highly skilled workers with more education see their incomes rise, while low-skilled workers see their wages reduced.
“The changing structure of the jobs market and associated decline of collective bargaining makes things worse. Various factors have led to the decline in the proportion of workers who are members of unions, and the IMF has found a relationship in advanced economies between this decline and the increasing share of incomes of the top 10%,” the report highlighted before adding that the informal sector continues to be one of the most important sources of income for people, especially women, in low-income countries, where workers are not entitled to minimum wages or workers’ rights and are therefore vulnerable to abuse.
Oxfam is calling for a fundamental change in the way economies are managed so that they work for everyone, not just a privileged few. The report is published amid increasing concerns about the economic status quo, with the Bank of England's Chief Economist warning recently that a 'rebirth of economics' is needed to replace out-dated models.
“Oxfam is calling for a more human economy where markets – a vital engine for prosperity – are better managed in order to ensure no one is left out or denied basic rights such as decent work, healthcare and education.” Key features would include:
improved cooperation between governments to prevent tax dodging that costs poor countries at least $100 billion every year;
Government action to encourage companies to act for the benefit of their workforces and wider society as well as their executives and shareholders;
taxes on wealth to generate funds for healthcare, education and job creation;
action to tackle the barriers that hold back women including lack of education opportunities and the burden of unpaid care work.
“Ultimately it is governments which are responsible for the rules, regulations and policies that govern our economies and shape our societies. Governments can, if they choose, use their power and policy tools to have a huge impact on reducing inequality in a country, and work in the interests of those towards the bottom of the economic distribution and of society more broadly. Or they can stand back and let the gap between the rich and the poor grow, exacerbating the inequality crisis,” the report advised.
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.
Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.
To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.
The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.
The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.
Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.
The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.
The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.
In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.
MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.
MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.
Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.
With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.
The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.
MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.
In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.
Business
BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.