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Coal shortage in Europe: Minergy CEO speaks

1. Europe once branded coal ‘dirty’ but their demand for it has skyrocketed once again. What do we learn about coal from what’s happening now in Ukraine?

There are over 80 countries in the world who still rely on coal as a form of energy. These are countries that are fighting to have basic necessities like electricity, which research shows increases their quality of life substantially. Energy poverty is real in Africa, India and Asia.

The Western approach to coal cannot be universal. We must remember that developed economies relied heavily on coal during their development. Challenges being faced by developing nations are unique. Demand for coal in Europe right now is driven by sanctions on Russian gas and coal and show that Europe might well be over-exposed to “green” with no back-up at times when there is no wind, running water, endless sunshine or faced with supply shortages. Coal is back in play in Europe because of the war, and despite massive adoption of clean energy in the US not all of the US uses clean energy.

In Germany and Italy, coal-fired power plants that were once decommissioned are now being considered for a second life. In South Africa, more coal-laden ships are embarking on what’s typically a quiet route around the Cape of Good Hope toward Europe. Coal burning in the US is in the midst of its biggest revival in a decade, while China is reopening shuttered mines and planning new ones
Coal remains and will remain an essential element in the energy mix. We need to make use of cleaner coal in such mix.

2. How much has been the projected demand of coal in the in the last couple of months?

Our key land export markets consist of 80-90% bound for South Africa and Namibia. In the last three months however, sea bound exports increased significantly with international traders buying to export to Europe and the West. We do not have specific numbers because the final destination overseas is determined by the international traders who buy coal from us. We remain hopeful that this demand continues.

3. How has the demand influenced Minergy exports to South Africa, Namibia and overseas?

Minergy remains committed to its local markets and continues to supply into these. A massive increase in demand from international markets, stemming from the Ukraine war and sanctions on Russia has come as a blessing to Minergy as lucrative pricing has made once uneconomical logistics feasible. This allowed Minergy to place additional product in new markets, markets historically uneconomical… We continue to look for alternative markets and supply to Namibia is one such market as well as the ability to use their ports as export routes for seaborne thermal coal.

4. Comment on the Minergy market access dynamics.

Refer to answer for question 2 and 3.

5. What would it take to fully explore the billions of tons of coal in Botswana?

Greater local and even foreign direct investment. Simplifying regulatory processes and promoting ease of doing business needs to be top agenda items. Coal has unfairly been de-campaigned in the West as a ‘dirty’ mineral which has swayed investors to look elsewhere for investment portfolios. With enough funders and investments in coal the huge deposits can change our power fortunes and energy independence. Given Botswana’s massive reserves, we are of the opinion that coal should be another diversified revenue stream for the Botswana Government. At Minergy we remain thankful for the support from Government as well as from internal development organizations that have supported our strategy and were instrumental in getting the mine to the phase that it is in at the moment. Partnership with government and open minds to managing coal is key.

6. What future do you project for Minergy in the medium and long term given what we see now in Europe?

We cannot predict how long the situation in Europe will last and we pray that it will be resolved as the loss of lives and destruction of the Ukraine is a human catastrophe. Our model is premised on fully optimizing our deposits for the benefit of Botswana and Batswana..

7. Open cast for coal is a new concept in Botswana. How has Minergy enhanced the skills base?

Opencast coal mining and the associated beneficiation of sized coal is a specialized industry. Currently there is no other similar operation in Botswana to recruit from.

The South African coal industry is well experienced with this plant operation and the requisite skill is found there. It is necessary for our operations to make use of such skills to operate the plant as we cannot find all the skill in Botswana. The skill for operating such a plant is different than diamond, tin, copper etc. processing. As such certain positions require expatriate recruitment, but all these positions are supported with understudy programmes

It is Minergy’s hope as part of its legacy, to promote and install fully qualified local opencast mining and coal beneficiation skills, currently not available in Botswana.

8. What are the projected human capital skills of the future in coal mining.

See response to question number 7.

9. Share experiences from the recent Mining Indaba. What is the future of coal?

Africa needs to be energy efficient and independent. We remain encouraged at the responsible strategy that the Botswana government has put into place to support this.

10. Kindly share in detail, infrastructural developments which were brought in place by Minergy in those communities.

We have an electronic brochure that showcases all the value add that we have contributed not to just the Medie village but Botswana as a whole. This is available at our office or electronically on our website www.minergycoal.com. Highlights include

Minergy paid for the electrification of the mine and the local Medie village benefited from the connection, allowing 500 people access to electricity through a self-funded prepaid system. As an extended part of Minergy’s social investment drive the Kgotla and the clinic have also been electrified, making day-to-day running of these essential services much easier and efficient. This is ahead of the Governments intended electrification programme, which was only planned for2024.

The quality of the road between Lentsweletau and Medie has been significantly upgraded compared to the state the road was in before mining operations commenced. Continuous road rehabilitation and dust suppression is undertaken in and around the villages to maintain road integrity. ( This is a public road, but the Group takes care of the road as it benefits the community in which the mine operates)

The dilapidated community hall has been refurbished including access to solar power and will be handed over to the community.

11. A development as huge as Masama Coal mine would usually result in the mushrooming of several other businesses to benefit from its value chain. In the case of Masama, kindly share businesses which have been created as a result of the growing value chain.

Readers are again referred to electronic brochure that showcases all the value add that we have contributed.

This phenomenon is indeed correct and there are a number of entrepreneurial businesses that have flourished including laundry services, bed & breakfast for suppliers visiting the mine or the area, housing built for rental accommodation, spaza shops and food stalls, first supermarket in Lentsweletau and additional building supply outlets established

We also make use of 12 locally owned and operated transporters, who are used by the mine to transport product, where applicable.

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Business

Banking on Your Terms: Exploring the World of Self-Service Banking

23rd February 2024

In today’s digital age, banking is no longer just about visiting a branch during business hours. It’s about putting you, the customer, in the driver’s seat of your financial journey. But what exactly is self-service banking, and how do you stand to benefit from it as a customer?

Self-service banking is all about giving you the power to manage your finances on your terms. Whether you want to check your account balance at midnight, transfer money while on vacation, or deposit cash without waiting in line, self-service banking makes it possible. It’s like having a virtual branch at your fingertips, ready to assist you 24/7.

This shift towards self-service banking was catalyzed by various factors but it became easily accessible and accepted during the COVID-19 pandemic. People of all ages found themselves turning to digital channels out of necessity, and they discovered the freedom and flexibility it offers.

Anyone with a bank account and access to the internet or a smartphone can now bank anywhere and anytime. Whether you’re a tech-savvy millennial or someone who’s less comfortable with technology, you as the customer have the opportunity to manage your finances independently through online banking portal or downloading your bank’s mobile app. These platforms are designed to be user-friendly, with features like biometric authentication to ensure your transactions are secure.

Speaking of security, you might wonder how safe self-service banking really is. Banks invest heavily in encryption and other security measures to protect your information. In addition to that, features like real-time fraud detection and AI-powered risk management add an extra layer of protection.

Now, you might be thinking, “What’s the catch? Does self-service banking come with a cost?” The good news is that for the most part, it’s free. Banks offer these digital services as part of their commitment to customer satisfaction. However, some transactions, like wire transfers or expedited bill payments, may incur a small service fee.

At Bank Gaborone, our electronic channels offer a plethora of services around the clock to cater to your banking requirements. This includes our Mobile App, which doesn’t require data access for Orange and Mascom users. We also have e-Pula Internet Banking portal, available at https://www.bankgaborone.co.bw as well as Tobetsa Mobile Banking which is accessible via *187*247#. Our ATMs also offer the flexibility of allowing you to deposit, withdraw cash, and more.

With self-service banking, you have the reins of your financial affairs, accessible from the comfort of your home, workplace, or while you’re on the move. So why wait? Take control of your finances today with self-service banking.

Duduetsang Chappelle-Molloy is Head: Marketing and Corporate Communication Services

 

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Business

Botswana records over P6 billion trade deficit

7th February 2024

Botswana has recently recorded a significant trade deficit of over P6 billion. This trade deficit, which occurred in November 2023, follows another deficit of P4.7 billion recorded in October of the same year. These figures, released by Statistics Botswana, highlight a decline in export revenues as the main cause of the trade deficit.

In November 2023, Botswana’s total export revenues amounted to P2.9 billion, a decrease of 24.3 percent from the previous month. Diamonds, a major contributor to Botswana’s exports, experienced a significant decline of 44.1 percent during this period. This decline in diamond exports played a significant role in the overall decrease in export revenues. However, diamonds still remained the leading export commodity group, contributing 44.2 percent to export revenues. Copper and Machinery & Electrical Equipment followed, contributing 25.8 percent and 10.1 percent, respectively.

Asia emerged as the leading export market for Botswana, receiving exports worth P1.18 billion in November 2023. The United Arab Emirates, China, and Hong Kong were the top destinations within Asia, receiving 18.6 percent, 14.2 percent, and 3.8 percent of total exports, respectively. Diamonds and Copper were the major commodity groups exported to Asia.

The Southern African Customs Union (SACU) received Botswana’s exports worth P685.7 million, with South Africa being the main recipient within SACU. The European Union (EU) received exports worth P463.2 million, primarily through Belgium. Australia received exports worth P290 million, while the United States received exports valued at P69.6 million, mostly composed of diamonds.

On the import side, Botswana imported goods worth P9.5 billion in November 2023, representing an increase of 11.2 percent from the previous month. The increase in imports was mainly driven by a rise in Diamonds and Chemicals & Rubber Products imports. Diamonds contributed 23.3 percent to total imports, followed by Fuel and Food, Beverages & Tobacco at 19.4 percent and 15.0 percent, respectively.

The SACU region was the top supplier of imports to Botswana, accounting for 77.7 percent of total imports. South Africa contributed the largest share at 57.2 percent, followed by Namibia at 20.0 percent. Imports from Asia accounted for 9.8 percent of total imports, with Diamonds, Machinery & Electrical Equipment, and Chemicals & Rubber Products being the major commodity groups imported. The EU supplied Botswana with imports worth 3.2 percent of total imports, primarily in the form of Machinery & Electrical Equipment, Diamonds, and Chemicals & Rubber Products.

Botswana’s recent trade deficit of over P6 billion highlights a decline in export revenues, particularly in the diamond sector. While Asia remains the leading export market for Botswana, the country heavily relies on imports from the SACU region, particularly South Africa. Addressing the trade deficit will require diversification of export markets and sectors, as well as efforts to promote domestic industries and reduce reliance on imports.

 

 

 

 

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Business

Business sector optimistic about 2024

7th February 2024

The business sector in Botswana is optimistic about the year 2024, according to a recent survey conducted by the Bank of Botswana (BoB). The survey collected information from businesses in various sectors, including agriculture, mining, manufacturing, construction, and finance, among others. The results of the survey indicate that businesses expect trading conditions to improve in the first quarter of 2024 and remain favorable throughout the year.

The researchers found that firms anticipate improvements in investment, profitability, and goods and services exported in the fourth quarter of 2023 compared to the previous quarter. These expectations, combined with anticipated growth in all sectors except construction and real estate, contribute to the overall confidence in business conditions. Furthermore, businesses expect further improvements in the first quarter of 2024 and throughout the entire year.

Confidence among domestic market-oriented firms may decline slightly in the first quarter of 2024, but overall optimism is expected to improve throughout the year, consistent with the anticipated domestic economic recovery. Firms in sectors such as mining, retail, accommodation, transport, manufacturing, agriculture, and finance are driving this confidence. Export-oriented firms also show increased optimism in the first quarter of 2024 and for the entire year.

All sectors, except agriculture, which remains neutral, are optimistic about the first quarter of 2024 and the year ending in December 2024. This optimism is likely supported by government interventions to support economic activity, including the two-year Transitional National Development Plan (TNDP) and reforms aimed at improving the business environment. The anticipated improvement in profitability, goods and services exported, and business investment further contributes to the positive outlook.

Firms expect lending rates and borrowing volumes to increase in the 12-month period ending in December 2024. This increase in borrowing is consistent with the expected rise in investment, inventories, and goods and services exported. Firms anticipate that domestic economic performance will improve during this period. Domestic-oriented firms perceive access to credit from commercial banks in Botswana to be relaxed, while export-oriented firms prefer to borrow from South Africa.

During the fourth quarter of 2023, firms faced high cost pressures due to increased input costs, such as materials, utilities, and transport, resulting from supply constraints related to conflicts in Ukraine-Russia and Israel-Hamas. According to the survey report, the firms noted that cost pressures during the fourth quarter of 2023 were high, mainly attributable to increase in some input costs, such as materials, utilities, and transport arising from supply constraints related to the Ukraine-Russia and Israel-Hamas wars. β€œHowever, firms’ expectations about domestic inflation decreased, compared to the previous survey, and have remained within the Bank’s 3 – 6 percent objective range, averaging 5.4 percent for 2023 and 5.4 percent for 2024. This suggests that inflation expectations are well anchored, which is good for maintenance of price stability,” reads the survey report in part.

However, firms’ expectations about domestic inflation decreased compared to the previous survey, and inflation expectations remained within the Bank’s objective range of 3-6 percent. This suggests that inflation expectations are well anchored, which is beneficial for maintaining price stability.

In terms of challenges, most firms in the retail, accommodation, transport, manufacturing, construction, and finance sectors considered the exchange rate of the Pula to be unfavorable to their business operations. This is mainly because these firms import raw materials from South Africa and would prefer a stronger Pula against the South African rand. Additionally, firms in the retail, accommodation, transport, and mining sectors cited other challenges, including supply constraints from conflicts in Russia-Ukraine and Israel-Hamas, as well as new citizen economic empowerment policies that some firms considered unfavorable to foreign direct investment.

On the positive side, firms highlighted factors such as adequate water and electricity supply, a favorable political climate, an effective regulatory framework, the availability of skilled labor, and domestic and international demand as supportive to doing business in Botswana during the fourth quarter of 2023.

Overall, the business sector in Botswana is optimistic about the year 2024. The anticipated improvements in trading conditions, supported by government interventions and reforms, are expected to drive growth and profitability in various sectors. While challenges exist, businesses remain confident in the potential for economic recovery and expansion.

 

 

 

 

 

 

 

 

 

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