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Botswana pins diamond beneficiation hopes on ODC 5 year strategy 

Government wholly owned diamond marketer, Okavango Diamond Company (ODC) has been tasked with the mammoth task of ensuring Botswana’s participation in the midstream and downstream of the multibillion pula lucrative industry increases significantly.

This was revealed by Minister of Mineral Resources, Green Technology & Energy Security, Lefoko Maxwell Moagi on Tuesday. Okavango Diamond was established in 2012 as a 100 % state owned company mandated with spreading Botswana’s wings in the diamond business through marketing and selling 15 % Debswana rough produce.

Debswana, which produces in the region of 24 million carats annually operates four (4) mines being Jwaneng, Orapa, and Letlhakane & Damtshaa Mines. The diamond mining behemoth which has propelled Botswana’s upstream muscle to global glory for decades makes all its produce to Diamond Trading Company Botswana(DTCB)  for sorting and valuing.

DTCB is the world’s largest and most sophisticated rough diamond sorting and valuing operation. Both DTCB and Debswana are 50-50 joint ventures of Botswana Government and global diamond business giant De Beers Group.

After DTCB, sorted  and valued rough diamonds are then taken to De Beers Global Sight holder Sales and Okavango Diamonds, the latter receives 15 % while the former, a De Beers wholly owned midstream operation, receives the remaining 85 %.

ODC was established to test the waters and develop Botswana’s capacity and ability to sell its own diamonds outside De Beers channels and price Book. Botswana alone through Debswana produces over 65 % of De Beers’ global output.

ODC has since inception delivered its mandated satisfactorily that government even hinted desires to have the company take more goods from DTCB. Currently ODC rakes in sales in the region of $500 Million annually (approximately P5 billion).

Minister Moagi said through its 5 year strategy Okavango Diamonds will now develop frameworks and deliberate pursuits intended at further spreading Botswana‘s wings across the value chain.

“ODC has developed a strategy that will propel Botswana into unprecedented participation and presence across the value chain, the cutting and polishing, jewelry making and retail has been incorporated in this strategy,”  he said.

Moagi explained that the ambition and roadmap goes beyond 5 years strategy because some projects intended at positioning Botswana in the downstream segment of diamond industry are long term.

“We have brought the aggregation of De Beers diamonds here, now we are in talks with relevant stakeholders to say massive cutting and polishing has to be done in Botswana.” The Minister further added that other players outside De Beers Group are coming onboard.

“Lucara which is our other producing company locally has bought into this dream, it is helping us cajole its customers to forge partnerships so that the manufacturing, cutting, polishing of their diamonds can be done in Botswana,” he said.

In terms of developing the Human Capital Moagi revealed that the Oodi technical college in partnership with French experts will accelerate training of Batswana and equipping them with serious skills in the space of cutting & polishing and jewelry making.

“Through ODC we are in talks with leading cutting and polishing firms globally for strategic partnerships, we want them to assist us with technologically advanced machines, while we still developing our own so that we build local capacity for massive industrialization in that space of cutting & polishing,” said Moagi.

The Minister further highlighted that Government will significantly invest in serious research and development to inform the country‘s pursuits and ambitions in diamond beneficiation and more participation down the value chain.

After assuming power in April 2018 ,  President  Mokgweetsi Masisi said it was time for Botswana  to increase participation in the diamond business, sentiments constantly reiterated by his Minister.

Botswana and its partner in the diamond business De Beers Group are currently under negations to renew sales agreement into another 10 year span. The last agreement which commenced in 2011 and delivered amongst others relocation of De Beers’s global aggregation and sales operation from London to Gaborone.

“We have had a wonderful relationship with De Beers and we expect that relationship to be even more cemented, there is a way of actually achieving a win-win for both, we want to participate more on cutting, polishing and retail,” Masisi said when talking to Bloomberg in May 2018.

De Beers Group’s other worldwide interest spans into the lucrative midstream and downstream space with businesses such as Forevermark, the Group’s jewelry retail outfit, ElementSix, the industrial technology and manufacturing company , as well as LightBox the newly established synthetic diamonds brand operating from United States. Botswana Government directly owns 15 % of De Beers Group, the remaining 85 % is owned by Anglo American PLC.

Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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Business

Electricity generation down 15.8%

9th January 2023

Electricity generation in Botswana during the third quarter of 2022 declined by 15.8%, following operational challenges at Botswana Power Corporation’ Morupule B power plant, according to Statistics Botswana Index of Electricity Generation (IEG) released last week.

The index shows that local electricity generation decreased by 148,243 MWH from 937,597 MWH during the second quarter of 2022 to 789,354 MWH during the third of quarter of 2022.

This decrease, according to the index, was mainly attributed to a decline in power supply realized at Morupule B power station. The index shows that as a result of low power supply from the plant, imported electricity during the third quarter of 2022 increased by 76.3 percent (123,831 MWH), from 162,340 MWH during the second quarter of 2022 to 286,171 MWH during the current quarter and Statistics Botswana added that the increase was necessitated by the need to augment the shortfall in generated electricity.

In the index Statistics Botswana stated that Eskom was the main source of imported electricity at 42.0 percent of total electricity imports. “The Southern African Power Pool (SAPP) accounted for 38.4 percent, while the remaining 10.1, 9.1 and 0.5 percent were sourced from Electricidade de Mozambique (EDM), Cross-border electricity markets and the Zambia Electricity Supply Corporation Limited (ZESCO), respectively. Cross-border electricity markets are arrangements whereby towns and villages along the border are supplied with electricity from neighbouring countries such as Namibia and Zambia.”

The government owned statistics entity stated that distributed electricity decreased by 2.2 percent (24,412 MWH), from 1,099,937 MWH during the second quarter of 2022 to 1,075,525 MWH during the third quarter of 2022. The entity noted that electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 85.2 percent during the third quarter in 2022 and added that this gives a decline of 11.8 percentage points. “The quarter-on-quarter comparison shows that the contribution of electricity generated to electricity distributed decreased by 11.8 percentage points compared to the 85.2 percent contribution during the second quarter of 2022.”

Statistics Botswana meanwhile stated that the year-on-year analysis shows some improvement in local electricity generation. Recent figures from entity show that the physical volume of electricity generated increased by 36.3 percent (210,319 MWH), from 579, 036 MWH during the third quarter of 2021 to 789,354 MWH during the current quarter. According to Statistics Botswana electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 57.7 percent during the same quarter in 2021. This gives an increase of 15.7 percentage points.

 

The entity noted that trends also show an increase in physical volume of electricity distributed from 2013 to the third quarter of 2022, thereby indicating that there are ongoing efforts to meet the domestic demand for power. “There has been a gradual increase of distributed electricity from the first quarter of 2013 to the third quarter of 2022, even though there are fluctuations. The year-on-year perspective shows that the amount of distributed electricity increased by 7.2 percent (71,787 MHW), from 1,003,738 MWH during the third quarter of 2021 to 1,075,525 MWH during the current quarter.”

The statistics entity noted that year-on-year analysis show that during the third quarter of 2022, the physical volume of imported electricity decreased by 32.6 percent (138,532 MWH), from 424,703 MWH during the third quarter of 2021 to 286,171 MWH during the third quarter of 2022. “There is a downward trend in the physical volume of imported electricity from the first quarter of 2013 to the third quarter of 2022. The downward trend indicates the country’s continued effort to generate adequate electricity to meet domestic demand, hence the decreased reliance on electricity imports.”

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