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De Beers Chairman plots Botswana’s growth prospects


The Chief Executive Officer (CEO) of Anglo American, who is also Chairman of De Beers Group, Mark Cutifani used the recent Botswana Confederation of Commerce Industry and Manpower (BOCCIM) 13th National Business Conference held in Maun, to share insights into Botswana’s economic projections.

Cutifani was invited in his capacity of business leadership position to share his insights about Botswana.

His remarks focused on answering the question of how Botswana should best leverage its enviable strengths to continue the growth trajectory established in the half century since independence.  

The De Beers Chairman said he understands that Botswana has long had the desire to diversify its economy away from diamonds. He explained that despite the growth achieved, the country arguably remains vulnerable to shifts in the global diamond market.

Diversification beyond extractives in general and diamonds in particular is crucial as proven resources will eventually deplete, he explained. “It is understandable that the leadership would like to make more progress towards having a more vibrant manufacturing, services and export economy,” he observed.

Cutifani said Botswana’s development strategy should be based on clear objectives that foster long term infrastructure development, the generation of intellectual capital, enhanced access to markets, inbound investments competition and improved relationships for all stakeholders.

According to Cutifani, Botswana needs three key ingredients to drive the depth and breadth of its primary growth path.

BOTSWANA HAS TO BUILD OFF HER NATURAL RESOURCES
According to Cutifani there are very few economies that have not begun their growth path outside of the mining and agricultural sectors. He indicated that Botswana is in a fortunate position to not only have the mineral endowment but, contrary to some other developing nations, to have used it well.  

“Mineral resources are like any other natural resources; you can either use them well or squander your endowment through short sighted and inadequate policy frameworks and approaches.”

Cutifani said Anglo American stands ready to partner with Botswana government in evaluating the economic viability of natural resource projects, across a range of commodities.

The De Beers chairman said beyond mining, tourism will continue to play a key role in promoting Botswana to the rest of the world. But he warned that tourism centers must be supported with complementary attractions and superior service that will be competitive with the country’s target customer base’s choices for high quality vacation experiences.

STRONG INSTITUTIONS, SOUND POLICIES CRITICAL
Modern public governance best practice indicates that progressive, consistent, transparent and business friendly policy environments are needed for business and economics to flourish. Cutifani explained that it should be any different in Botswana. He said the country must continue to strengthen its public institutions to develop standards and norms compatible with the most successful democracies in the world.

He advised that success in this area requires a hard and honest look at the country itself and readiness to make changes where necessary to the country’s way of life norms and customs. Cutifani shared that Botswana should realize that it is competing for capital against Singapore, Brazil, Tanzania, Italy and South Africa, among other countries.

“Botswana should make it easier for foreign businesses to operate in Botswana,” and in relation to attracting Foreign Direct Investment (FDI) and ensuring the country’s global competitiveness, Cutifani advised “today living in the interconnected world, business has no boundaries because prices are global not local. States should not try and impose prices onto a producer or to cross subsidize inefficient industries by distorting prices, this compromises natural competitive advantages and opportunities and embeds inefficiently through ought an economy and society. All prices eventually come back to a global value.”

DEVELOP AND INCLUDE SOCIETY IN THE GROWTH PLAN
Fortunately for Botswana, the world’s greatest and most destructive sources of social divisions and strife (ethnicity, religion, language and class) have had relatively minimum impact on Botswana’s fabric in the period since its independence. He expressed that it is certainly encouraging that democracy, development, dignity, discipline and delivery continue to be upheld as the country’s moral code through the 5D’s roadmap. He added that this is an essential ingredient to maintaining peace, the rule of law and stability in the country.

Cutifani explained that creating opportunities through investments in infrastructure is also critical. He explained that without infrastructure sustainable growth and truly diversified economy cannot be achieved. He stressed that it is important to facilitate and build infrastructures that supports other industry opportunities, in terms of access through roads and rail but also energy and information technology services.

He also advised on intellectual capital as the most important resource it could be for Botswana highlighting that young people is more valuable than the country’s diamonds.

“The quality of Botswana’s future will be determined by the quality of its leadership and the talents the country develops and retain to take its challenge. If Botswana does not find a way to make it attractive to the country’s brightest and most talented they will be lost to a world that owes Botswana a little.”

Cutifani advised that while attracting diamond grading expertise and research activities in Botswana will generate some economic activity in the short term, but the real long term value lies in retaining the intellectual property generated by attracting the world’s young high potential talent and skilled workforce to this country.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020
Diamonds

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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