One step forward, one step back for BMC
Business
Chief Executive of BMC, Dr Akolang Tombale
The Botswana Meat Commission this week welcomed much needed relief in the form of P300 million to restructure its balance sheet, changing the gearing of the Company.
On Monday this week, parliament approved supplementary funds sought by Finance Minister Kenneth Matambo, to increase the Total Annual Provision of the Botswana Meat Commission by P300 million.
“The funds are required to finance the Commission’s operational losses for the current financial year which have put pressure on the Commission’s cash flows,” said Matambo to Parliament this week.
Matambo said that the move to give funds to BMC would only be to move funds that were approved for the now delayed Zambezi Field Services sub project as well as under spending in the ISPAAD programme due to drought.
However, the funds fall far short of addressing the Commission’s P800 million debt that has accumulated in years that it was not profitable.
The Commission’s debt earlier in 2015, stood at P769 million in loans, the major portion having been the P569 million circumvented to it during the 18 month EU delisting period of from 2011, when there was virtually no production. A P125 million loan was also sourced from First National Bank for the upgrading of the Francistown abattoir as well as a P50 million loan from P50 million from BancABC to resuscitate the Maun plant.
The Commission pays P45 million yearly in interest charges for loans taken from First National Bank Botswana and P7,6 million to BancABC, bringing both capital and interest repayments to P86 million a year.
In an exclusive interview with BusinessPost this week, the chief executive of BMC, Dr Akolang Tombale, said this was only the first part in the recapitalisation of the Commission which has since shed its mismanagement issues of yesteryears and has gone back to profitability. But the debts that the company has accumulated need to be serviced and especially the private finance houses are putting cash flow pressures on the commission.
Tombale said this, coupled with the long cash cycle that the Commission is saddled with. “It takes an average of 131 days to put cattle into the market, selling to entities that do not pay upfront.”
“Our balance sheet needed restructuring; when we take out loans, we are considered risky because of the debt that we have and that makes interest rates offered to go high.”
“We have been saying to Government that we have to recapitalise the Commission; some would call it a bailout but it is not like that; recapitalisation is nothing foreign and it has been before if you remember Debswana some years back, But it should be done in a way that it does not have to be recapitalised again after that,”
“The next step is now for Government to make a decision on which direction the Commission takes; I am not necessarily talking about privatisation but there is a need for new equity; then we can see about refurbishing the Lobatse plant,” said Dr Tombale.
Tombale said that an advisory body is currently consolidating all views to restructuring of the Commission and these will be duly presented to Government. “Operationally we are among the best on the continent though,” he said.
He said that it is likely that farmers will own the Commission in a cooperative format, such as that used by MeatCo of Namibia, whereby farmers own a stake and the government remains with a minority stake. “This is another move that will put the responsibility of the beef value chain on the farmers,” said Tombale.
“We need to see change in how we do cattle business; currently, most people sell their cattle when there is an emergency and that should stop; we should be more commercial minded.”
In June this year, the BMC introduced some incentives for farmers to go commercial by increasing prices per kilogram of grade prime to Grade 2 by 5 percent, and Grade 3 cattle by 10 percent, as well as the introduction of an incentive ranging from 30 thebe to 70 thebe per kilogram for farmers that honour arrangements to bring specified numbers of head at specified dates.
Brian Dioka, BMC spokesperson, said that it is too early to assess the effectiveness of the new initiative, saying a review will be done in October.
NGAMILAND CRISIS
Dr Akolang Tombale is despondent after outbreak of Foot and Mouth Disease, which was announced last week. While the Ngamiland area has for many years been plagued by outbreaks of disease, cattle from Hainavelt had always been disease free hence they were enjoying a stable market in Zimbabwe.
Tombale said that while beef from Ngamiland was fetching low prices because of the lower value markets that is sold to, there was growing enquiries for beef.
He revealed that in June and July alone, 60 tons of beef were exported to Albania, but the outbreak of FMD in the Hainevelt reverses all this and all other positives garnered in the effort to make Ngamiland beef farming viable.
This comes in the wake of an announcement recently that Maun abattoir would be closed temporarily to pave way for upgrading of the plant and that an arrangement had been made to sell cattle from Hainavelt farms to Francistown abattoir. Agriculture minister Patrick Ralotsia, last week said that government spends P20 million annually to contain FMD in the Ngamiland area, but the debilitating outbreaks still continue due to breaching of fences that separate livestock from wildlife.
vmatumo@weekendpost.co.bw
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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.

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.

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.