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Gold mining company caught out in illicit mining

Mupane fined for illegal mining of dumps after admission by miner

Mupane Gold Mining Company has found itself on the wrong side of the Department of Mines, after illegally mining gold ore from ore dumps in Matsiloje village that have been building up since the 1800s during the gold rush.

Gold was discovered along the Tati River in around 1867 and soon the area was full of prospectors staking their claims. By the 1940's, however, the gold mining had slowed, and there are only a few of the larger mines still operating today. Mupane Gold is one of the remaining large gold miners in the area.

In a letter dated 3 March, 2015, Minister Mokaila wrote to Mupane Gold Mining company, fining the company an amount of P50,000, for mining outside its licensed mining area.

A savingram addressed to the Permanent Secretary in the Ministry of Minerals, Energy and Water Resources, issued by the Director of Mines in the same Ministry, dated 19th February 2015, relates how the gold miner was caught out, mining the ancient dumps and tailings for more mineral content, which fall outside of its licensed mining area.

On the 1st September, 2014, officers of the Department of Mines met company Director, Charles Byron, after reports of illegal mining of the dumps at Matsiloje, in the north eastern region of Botswana, 30 kilometres from the City of Francistown.

“Mr Byron admitted that it was Mupane Gold Mining which was mining the dumps at Matsiloje for treatment of material to recover gold,” reads the savingram.

 The company is said to have mined out 19,969 tonnes (10,939 cubic metres) of material at two dumps in Matsiloje village, one being a tailings dump and the other being a waste rock dump.

“The company had not sought nor acquired any mining rights from the minister of Minerals, Energy and Water resources before mining the dumps,” states the savingram.

It is further said that, while the company has initially claimed that the material was removed to rehabilitate the areas, “it appears the main motive for the removal of the dumps was recovery of gold for profit.”

 The company failed to show the shafts that were rehabilitated or the safety of the grounds of the supposedly rehabilitated area.

While the company had initially claimed that Matsiloje village kgosi (chief) had given them permission to mine the dumps, it turned out that the kgosi was in actual fact one of those who had reported the mining activity to the Department of Mines, soon after the mining started.

This week, the Public Accounts Committee of Parliament, conduct Value For Money assessments of projects under the Ministry of Minerals Energy and Water Resources.

“With new and better technologies, miners are able to extract even more mineral content from the ore they had initially dumped; this is billion dollar business and companies all over, even in South Africa are doing it,” said PAC member, Samson Guma Moyo.

The company executives of Mupane Gold Mining could not be reached as they were said to be all on leave, at the time of going to press.

Pressed for answers on the relatively lenient fines given for mining companies, the permanent secretary in the Ministry of Minerals Energy and Water Resources, Kgomotso said as a Ministry, they would push for amendments to the Mining Act that would allow the authorities to confiscate all the company assets that were used in the illegal acts.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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