The Botswana Institute of Development Policy Analysis (BIDPA) has proposed extensive Policy recommendations in a Study into the Consequences of and Responses to the Depletion of Botswana’s Diamonds, estimated to creep in after 2027.
The Botswana After Diamonds report hovers on major issues of Encouraging more mining and exploration activity; Diamond production rate; and Planned infrastructure projects. BIDPA calls on government to be aggressive when dealing with these matters and to take real steps to mitigate the aftermath of 2027.
First among other issues, BIDPA sneaks into the legal and fiscal regime for mining in Botswana which is currently very competitive with the country being ranked in position 4 by resource Stocks magazine and 8th position by the Fraser Institute. Of the eleven exploration and mining companies in Botswana interviewed in the study, the majority find the mining laws in Botswana to be ‘fine and useful’ and the administrative process to be ‘fair and open’.
According to the BIDPA study, the issues relevant to mining laws are – future and current tax regime, and land claim and land issues. BIDPA recommends that Botswana’s level of mineral Royalties take into consideration the profitability of mining project and the latter, other things being equal, depends on the value of the mineral being mined. In this way, base metals and coal attract the lowest royalty rate of 3 % followed by precious metals, that is, gold, silver and platinum group metals at 5% and lastly diamonds at 10 %.
“We therefore do not believe there is additional incentive in lowering these rates as the level of prospecting activity is very high. We also would not recommend that these be raised as this may discourage the prospecting activity, which would do more harm than good. We however believe that there is always room to modernise the royalty formula, for instance, going to a sliding scale formula so that even some diamond mines that may have similar levels of profitability to other minerals such as base metals and coal are not overburdened by fixed royalty rate of 10 %,” reads part of the study report.
According to the study, which was edited by Roman Grynberg, Margaret Sengwaketse and Masedi Motswapong, BIDPA is convinced that the fiscal regime is well defined for non-diamond minerals while for diamonds section 51 of the Act stipulates that there will be a negotiation. “We believe that it is the secrecy of the negotiated regime that may be creating uncertainty and government should find ways of addressing this.” In response to this concern, BIDPA notes:
“Regarding the taxation issues, we believe government should find means to publicise those mining regimes that, after negotiation, still end up with the standard tax regime for mining to provide comfort to the current junior mining companies exploring for diamonds.”
Government should continuously explain the benefits of overlapping prospecting licences. According to the BIDPA researchers, it seems that this has not been sufficiently explained to the mining industry. In addition they have recommended that government should consider an Act for the Coal Bed Methane (CBM) gas and its accompanying regulations to assist in guiding activity in this area.
Meanwhile BIDPA notes that there is a lot of interest in exploration in Botswana, with the whole of the country taken up by exploration companies with only the swamps and some deep sand-covered areas of the Kalahari remaining open as they are inaccessible. “There is therefore need to ensure that only value-adding applications for exploration are approved to eliminate huge land holdings without the accompanying progress towards mine development.
The study also highlights the issue of water and power. “While some projects may be located near existing water and power infrastructure, the challenge faced by the project developers is that there are no set mechanisms for them to obtain such water and power. We therefore recommend that government consider a mechanism whereby the water and power utility companies develop the infrastructure to support the mining project and then recover the cost of such development through higher charges until their cost have been recovered. This would facilitate project development as they would be spared the upfront costs, which also improve project economics,” observers the BIDPA analysts.
The BIDPA study also touches on diamond production rate, stating that it seems Debswana is placing itself in the position of ‘swing producer’, adjusting its target production so as to leave the global supply/ demand balance in a position of shortage rather than surplus, and hence tending to push prices up, or at least maintain them if there are other negative forces at work.
In their view, the cushion of 10 million carats p.a between Debswana’s peak production and its recent production levels is certainly enough to influence the global supply/demand balance according to whether those 10 million carats p.a are being produced or not. “And the experience of the past three years does suggest that international market prices have responded to Debswana’s actual planned production rates,” they state.
BIDPA advises that in the short term Government should study the various production scenarios with the view to possibly revising the current long-term mining plans, which seem to be informed by the validity period of the mining leases for Debswana, which all run until 2029. Furthermore, BIDPA is of the view that Government should consider a policy of postponing possible projects at Debswana mines so that these are phased in at the end of the open-pit mining operations.
“These projects are profitable on their own (stand-alone- projects) and would not depend on the existing open-pit operations.”
Regarding rail and port infrastructure, future coal export projects and some copper and silver projects in the Ghanzi copper belt would rely on this, BIDPA says. “We therefore believe that government should be a joint venture partner in order to ensure that future projects benefit. We, however, caution that due to the scale and possible risks involved, government should conduct a thorough due diligence ahead of any participation in such infrastructure projects.”
The researchers indicate that the projected government mineral revenues from future coal mines are dependent on the existence of rail and port infrastructure to export the washed coal to the world steam coal markets in Asia and Western Europe. “Until concrete steps are seen on the development of the rail and port infrastructure upon which these projects depend, we believe they should be accorded a low probability of being realised by 2026.”
This BIDPA study was conceived about five years ago during the Global Economic Crisis and the impact this had on the economy of Botswana and on the private sector. At that time there was a dramatic decline in the demand for luxury commodities – diamonds and tourism services – which are two of Botswana’s most important export sectors.
These were hit disproportionately as a result of the economic crisis. Diamond mining, the principal source of revenue in the country, declined dramatically in 2009 as the mines at Jwaneng and Orapa were temporarily shut. In 2009 diamond production fell to 17.7 million carats from 32 million the previous year.
In conclusion, BIDPA observes that over the next 10-15 years, government mineral revenues are projected to rise on the back of a projected improvement in diamond prices that would be underlain by strong supply/demand fundamentals.
“While the decline in government mineral revenues from diamonds seems unlikely to occur within the period of projection for this study, we would like to caution that there would be a significant crunch when the open-pit mining operations cease, beginning in about 2027.”
Lebang Mpotokwane, one of the conveners who presided over the opposition cooperation talks that resulted in the formation of the Umbrella for Democratic Change (UDC), has advised against changing the current umbrella model in favour of a merger as proposed by others.
The Botswana Congress Party (BCP) leader, Dumelang Saleshando recently went public to propose that UDC should consider merging of all opposition parties, including Alliance for Progressives (AP) and Botswana Patriotic Front (BNF).
Saleshando has been vehemently opposed by Botswana National Front (BNF), which is in favour of maintaining the current model. BNF’s position has been favoured by the founding father of UDC, who warned that it will be too early to ditch the current model.
“UDC should be well developed to promote the spirit of togetherness on members and the members should be taught so that the merger is developed gradually. They should approach it cautiously. If they feel they are ready, they can, but it would not be a good idea,” Mpotokwane told WeekendPost this week.
Mpotokwane and Emang Maphanyane are the two men who have since 2003 began a long journey of uniting opposition parties in a bid to dethrone the ruling Botswana Democratic Party (BCP) as they felt it needed a strong opposition to avoid complacency.
Tonota born Mpotokwane is however disappointed on how they have been ejected from participating in the last edition of talks ahead of the 2019 general elections in which BCP was brought on board. However, despite the ejection, Mpotokwane is not resentful to the opposition collective.
He said the vision of opposition unity was to ultimately merge the opposition parties but he believes time has not arrived yet to pursue that path. “The bigger picture was a total merger and we agreed that with three independent parties, members might be against merger eventuality so the current model should be used until a point where they are now together for as long as possible,” he said.
“UDC should gradually perform better in elections and gain confidence. They should not rush the merger. We have been meeting since 2003, but if they rush it might cause endless problems. If they are ready they can anyway,” he advised. For now the constituent parties of the umbrella have been exchanging salvos with others (BCP and BNF).
“There are good reasons for and against merging the parties. Personally, I am in favour of merging the parties (including AP and BPF) into a single formation but I know it’s a complex mission that will have its own challenges,” Saleshando said when he made his position known a week ago.
“Good luck to those advocating for a merger, it will be interesting to observe the tactics they will use to lure the BPF into a merger,” former BNF councillor for Borakalalo Ward and former BNF Youth League Secretary General, Arafat Khan, opined in relation to BCP’s proposed position.
Mpotokwane, who is currently out in the cold from the UDC since he was ejected from the party’s NEC in 2017, said the current bickering and the expected negotiations with other parties need the presence of conveners.
“We did not belong to any party as conveners so we were objective in our submissions. If party propose any progressive idea we will support, if it is not we will not, so I would agree that even now conveners might be key for neutrality to avoid biasness,” he observed. Despite being abandoned, Mpotokwane said he will always be around to assist if at all he is needed.
“If they want help I will be there, I have always been clear about it, but surely I will ask few questions before accepting that role,” he said. UDC is expected to begin cooperation talks with both AP and BPF either this week or next weekend for both upcoming bye-elections (halted by Covid-19) and 2024 general elections and it is revealed that there will be no conveners this time around.
The Botswana Democratic Party (BDP) moved through its lawyers to attach the property of Umbrella for Democratic (UDC) President Duma Boko and other former parliamentary contestants who failed in their court bid to overturn the 2019 general elections in 14 constituencies.
WeekendPost has established that this week, Deputy Sheriffs were commissioned by Bogopa Manewe Tobedza and Company who represented the BDP, to attach the properties of UDC elections contents in a bid to recover costs. High Court has issued a writ of execution against all petitioners, a process that has set in motion the cost recovery measures.
Botswana Sectors of Teachers Union (BOSETU) says COVID-19 as a pandemic has negatively affected the education sector by deeply disrupting the education system. The intermittent lockdowns have resulted in the halting of teaching and learning in schools.
The union indicated that the education system was caught napping and badly exposed when it came to the use of Information System (IT), technological platforms and issues of digitalisation.
“COVID-19 exposed glaring inefficiencies and deficiencies when it came to the use of ITC in schools. In view of the foregoing, we challenge government as BOSETU to invest in school ITC, technology and digitalization,” says BOSETU President Kinston Radikolo during a press conference on Tuesday.
As a consequence, the union is calling on government to prioritise education in her budgeting to provide technological infrastructure and equipment including provision of tablets to students and teachers.
“Government should invest vigorously in internet connectivity in schools and teacher’s residences if the concept of flexi-hours and virtual learning were to be achieved and have desired results,” Radikolo said.
Radikolo told journalists that COVID-19 is likely to negatively affect final year results saying that the students would sit for the final examinations having not covered enough ground in terms of curriculum coverage.
“This is so because there wasn’t any catch up plan that was put in place to recover the lost time by students. We warn that this year’s final examination results would dwindle,” he said.
The Union, which is an affiliate of Botswana Federation of Public, Private and Parastatal Union (BOFEPUSU), also indicated that COVID-19’s presence as a pandemic has complicated the role of a teacher in a school environment, saying a teacher’s role has not only transcended beyond just facilitating teaching and learning, but rather, a teacher in this COVID-19 era, is also called upon to enforce the COVID-19 preventative protocols in the school environment.
“This is an additional role in the duty of a teacher that needs to be recognized by the employers. Teachers by virtue of working in a congested school environment have become highly exposed and vulnerable to COVID-19, hence the reason why BOSETU would like teachers to be regarded as the frontline workers with respect to COVID-19,” says Radikolo.
BOSETU noted that the pandemic has in large scales found its way into most of the school environments, as in thus far more than 50 schools have been affected by COVID-19. The Union says this is quite a worrying phenomenon.
“As we indicated before when we queried that schools were not ready for re-opening, it has now come to pass that our fears were not far-fetched. This goes out to tell that there is deficiency in our schools when it comes to putting in place preventative protocols. In our schools, hygiene is compromised by mere absence of sanitizers, few hand-washing stations, absence of social distancing in classes,” the Union leader said.
Furthermore, Radikolo stressed that the shifting system drastically increased the workload for teachers especially in secondary schools. He says teachers in these schools experience very high loads to an extent that some of them end up teaching up to sixty four periods per week, adding that this has not only fatigued teachers, but has also negatively affected their performance and the quality of teaching.
In what the Union sees as failure to uphold and honour collective agreements by government, owing to the shift system introduced at primary schools, government is still in some instances refusing to honour an agreement with the Unions to hire more teachers to take up the extra classes.
“BOSETU notes with disgruntlement the use of pre-school teachers to teach in the mainstream schools with due regard for their specific areas of training and their job descriptions. This in our view is a variation of the terms of employment of the said teachers,” says Radikolo.
The Union has called on government to forthwith remedy this situation and hire more teachers to alleviate this otherwise unhealthy situation. BOSETU also expressed concerns of some school administrators who continuously run institutions with iron fists and in a totalitarian way.
“We have a few such hot spot schools which the Union has brought to attention the Ministry officials such as Maoka JSS, Artesia JSS, and Dukwi JSS. We are worried that the Ministry becomes sluggish in taking action against such errant school administration. In instances where action is taken, such school administrators are transferred and rotated around schools.”