BCL’s Polaris 11 to boost GDP growth by 15%
Business
Through the implementation of Polaris 2, BCL seeks transform itself from a mere resource mining company by adding value to its copper and nickel and by-products as a basis of reinvent itself as a fully diversified conglomerate through mergers and acquistions, according to BCL Divisional Manger Motsie Sibanda.
The company is planning ahead so that when the hen which lays the golden egg finally perishes, both BCL and the smoky town will be resurrected and reincarnated to remain relevant in continuing to provide decent wages supporting many families and providing impetus to economy of Selibi-Phikwe.
In this regard, BCL is carrying out a major pre-feasibility study for establishing a 8000 ton per annum copper nickel refinery for making refined grade copper nickel cathade. The refinery proposition has the capacity to create about 600 additional jobs.
The study also seeks to expand and sustain nickel production circuit, develop a chemicals and by-products production circuit, develop a precious metals and other minerals production circuit, develop an iron production circuit, develop a coal production and beneficiation circuit, acquire equity interests in and develop a precious metals and other minerals production circuit and establish the basis for major chemicals and chemicals by-products industries.
BCL has found a lacuna to diversify from its current business model as it is clearly not sustainable.
The community of the greater SPEDU region would be adversely impacted by the closure of the BCL operations. POLARIS II seeks to address the projected demise by creating an industry that will be bigger than the current set up.
BCL strategic plan in the short to medium terms calls for beneficiation of its resource bases and making optimal use of its smelting facility and turning the company into an viable enterprise while in the long term, there are plans to turn the company into a regional diversified resource group attracting business from other base metal mining houses to add value to their mineral products using the smelter at BCL and venturing into the production of chemicals including acids and fertilizers.
The company also seeks to acquiring equity interest in coal, energy, iron and steel businesses and other minerals in order to further diversify its portfolio.
“BCL needs to diversify because its current business model is not sustainable. The people of greater SPEDU region would be adversely impacted by the closure of the BCL operations. Polaris 11 seeks to address the project demise by creating an industry that will be bigger than the current set up”, says Sibanda.
Precious mineral exploration licences have already been acquired and exploration is currently in progress. The construction of the steel production has been completed and was officially opened on October 25 this year and is expected to employ 1000 people. Scrap Metal is the major input for the plant.
Power is the second major input and gasifier produces gas by burning coal and is used to fire furnaces. A commitment with suppliers has been concluded to secure supply of scrap.
The production process of producing finished steel from scrap involves extraction of bulk steel in the induction. Furnace manufactures billets by feeding molten metal to a “concast”. Product could be exported in billet form; or billets could be further processed into higher value products.
The aspect of coal production and beneficiation seeks to acquire coal resource this year and at the same time complete a coal to liquid study.
BCL is also determining the feasibility of utilizing the sulphur dioxide emissions to produce valuable by products and making Botswana self sufficient in the production of fertilizers and thereby supporting other downstream industries. The company will further vigorously persue securing long term minerals for the BCL smelter and medium to long term exploration of other copper nickel deposits and toll treating opportunities.
This will include not only securing mineral concentrates for the smelter, but also future expansion refining capabilities and making more acquisitions of equities in their business entities. Beneficiation process will include more capacity for further stages in the refining of copper and nickel and other base metals.
It is anticipated that at the end the economic and social benefits of efforts with Polaris 11 will be the generation of employment opportunities for approximately 4000 people directly when fully realized, industrialization of the economy, precisely the manufacturing sector, support government policies for economic diversification and growth and which in turn will contribute towards social, economic and political stability and extend the life of the city of Selebi Phikwe.
Other indirect economic benefits will the building of more infrastructure and the project has the potential to make a 15% contribution to Botswana’s GDP and increase manufacturing sector GDP by more than 2.5 times from the current 6%, when the project is fully operational.
The project will further add impetus to Botswana becoming a manufacturing hub in the SADC region and promoting the country as hub for the production of fertilizers in all of Africa and develop local community infrastructure in partnership with the government.
Direct economic and social impact will be the generation of employment opportunities for the local population of about 1000 people in the facility with further multiplier effects of generating employment from associated projects in construction of facilities and their maintenance, logistics and products distribution and supporting and promoting local businesses.
It is also anticipated that the project will improve the living standards, increase disposable incomes and consumer spending and promote best practices in the use of fertilizers to increase yields in agricultural production and provide detergents and chemicals for office, household and industrial use.
The harzadous environmental effects of sulphur dioxide emissions will also be contained at last with 100% consumption of harmful by-products while further ensuring compliance with all the government and international standards of emissions and effort to promote healthy living environment.
Business
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.
Business
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.
Business
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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