BB vows to resuscitate Phikwe
Ever since government announced provisional liquidation for BCL mine, the economic nucleus of Selebi Phikwe, parastatals, government investment arms as well as senior government officials have descended the copper nickel mine, all in attempt to put forth convincing resuscitation proposals.
However not all of the visitors from the big city were given the warm welcome- Investment, Trade and Industry Ministry’s permanent secretary, Peggy Serame’s task team was last week Monday told to go back to their “CBD lucrative offices” in Gaborone.
The team which comprised amongst others, BDC and BITC top brass and other senior government officials was rendered as a waste of time by the aggrieved Phikwe business persons. Vice President Masisi‘s stakeholder address was also a chaotic gathering as business owners demanded the truth about sudden closure of their biggest trading partner. Contrary to the latter, Business Botswana as the voice of private sector businesses in Botswana gathered Selebi Phikwe Business Community on Monday (October 17th) at Cresta Bosele Hotel to get their views on the way forward regarding the future of Phikwe. Lekwalo Mosienyane’s delegation, which was well received, had something worthy to take back to Gaborone at the end of their visit.
It was agreed that a regional task team which was to compromise of Phikwe business people from different sectors was to be set up to work with the national BCL shutdown response task team formed by Business Botswana. The Phikwe regional task team will liaise through Business Botswana Vice President (North), Palalani Moithobogi who is also a business magnet based in Selebi Phikwe. When addressing the business community, Business Botswana President, Mosienyane said there was light at the end of the tunnel for Selebi Phikwe, “from a business perspective, situations like this can uncover billions in hidden business ventures and value chain opportunities,” he said. He noted that Business Botswana as the mouth piece of the private sector in the country is in a position to offer any urgent assistance necessary to help address the situation which currently threatens to turn Phikwe into a ghost town.
For his part, Business Botswana Chief Executive Officer, Dr Racious Moatshe told WeekendPost that already there is a national task team that compromises of all stakeholders mandated to respond to the Phikwe situation in terms of cultivating other business ventures and economic alternatives to keep Selebi Phikwe alive. The purpose of the meeting, he revealed, was to get the mining town’s business community on board.
“We are here basically to prevent these business people from disinvesting from this town, we agreed that they form a task team which will work hand in hand with the national one into developing a position paper from the private sector point of view and present it to government enclave,” said Moatshe.
He added that the task team will comprise of representatives from various areas of business including retail and hotels. “Liaising with our Vice President ( North) the regional task force intends to develop short term, medium term and long term intervention strategies to rectify the situation here and prevent the worst regional economic crush in our history from hitting Selebi Phikwe.’’
Botswana Chamber of Mines Chief Executive Officer Charles Siwawa expressed hope for BCL itself. “The mine can still be operational under a restructured business model, BCL lifespan is not over yet,’’ said the soft spoken Mining expert.
Siwawa told WeekendPost that BCL Group as a whole sits under high grade ore deposits on some of its shaft as well as the Tati belt, in contradiction to Minister Sadique Kebonang’s sentiments that the ore value is very low.
”From the figures we have and last prospects reviews about BCL deposits, it’s not over yet for Bamangwato Concessions Limited, the mine needs capital injections to observe its sustainability until commodity prices realize growth and business feasibility, and we are talking about billions of pula. BCL is currently making losses because of high operation costs, which need to be stripped down, should the mining resume,’’ Siwawa asserted.
Furthermore, Siwawa believes that the mine can be sold to different investors in order to raise enough capital to keep the operations running for a period of two years or so, with the hope of commodity price improvement. “No one will probably inject 8 billion into a fragile business like this alone, thus we need to sell profitable shafts to different investors on share basis to gather the huge money needed to assume operation here.”
Mosienyane also chirped in, advising the Phikwe Business community to form a consortium in order to gather up finances they might have to ready themselves for possible purchase of some of the mine operations.
“The consortium can also be used to collectively venture into different business alternatives hence keeping Phikwe economy alive,’’ said Mosienyane.
Chaos over SPEDU erupted during meeting
Earlier on, during the same meeting, chaos erupted at the mention of Selebi Phikwe Economic Diversification Unit (SPEDU). Although media was ordered to leave the meeting when the chaos started, WeekendPost can reveal that the business people in that town want nothing to do with the diversification unit. SPEDU is accused of funds embezzlement and the business society squarely blames it for failed economic diversification over the past 8 years in the mining town. Further, the business community called on government to cease pumping money into SPEDU.
Meanwhile, Mosienyane said that as a former SPEDU board member, he has yet to get accountability from SPEDU about certain dealings, such as the multimillion Basil project. He added that the SPEDU board as the governing body of the parastatals needs to be reviewed.
“I want to put this on record that SPEDU cannot revive Phikwe without representation of Phikwe business community in its board, we want to seat in the SPEDU board as the private sector,’’ explained Mosianyane .
According to the soft spoken private sector mouth piece who is also a renowned architecture and business man ,SPEDU needs to affiliate with Business Botswana now that it’s a semi autonomous company that can invest and make money.
“SPEDU should have less of government representation in the board but more of regional business people. All it should do is return to government positive cash flow, investment returns, jobs and consequently total independence from government cash flow, not the current reckless spending we hear about.’’
The meeting generally concluded that a position paper will be presented to the decision makers in a month’s time, recommending possible diversion of ESP funds to Selibe Phikwe, and putting halt to some SPEDU projects like Platjan Bridge.
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Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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