ReconAfrica dispels fears of environmental damage in its exploration bid in Botswana
ReconAfrica, a Canadian-based energy company, has faced backlash from some quarters over its oil and gas exploration in the Kavango Sedimentary Basin, but the company has reaffirmed that its pursuits will not damage the environment, let alone the Okavango Delta.
Through its subsidiaries, Reconnaissance Energy Botswana (REB) and the Reconnaissance Energy Namibia (REN), the company is working collaboratively with Namibia and Botswana governments to explore oil and gas potential in the Kavango Sedimentary Basin. In REB was granted Exploration Licence 001/2020 (EL 001/2020) in June 2020.
Despite fears over the project’s potential impact in the Okavango delta, and other tourism rich areas in the periphery, the licence granted to REB excludes National Parks, the Tsodilo Hills and the Okavango Delta. REB said in addition to limitation from the licence, the company also self-imposes additional buffer zones to avoid environmentally sensitive areas.
“The REB project is a conventional oil and gas project and hence no hydraulic fracturing is involved. REB does not have the intention to, nor will it request any permits for, project activities that include hydraulic fracturing – a point which ReconAfrica and the government of Botswana have publicly stated,†said the company Director – Government and Stakeholder Relations, Ame Makoba.
STAKEHOLDER CONSULTATIONS IN BOTSWANA
Makoba said REB is carrying out a work plan – which includes stakeholder mapping – and a regulatory review in 2022, in anticipation of an Environmental Impact Assessment (EIA). ReconBotswana has appointed a private company, Loci Environmental, to do stakeholder mapping and regulatory review.
“This step is necessary in order to assist to identify all stakeholders prior to the actual commencement of consultations regarding oil and gas exploration. What we really want people to know is that we are not exploring for Oil and Gas in The Okavango Delta, Tsodilo Hills nor National Parks,†Makoba said.
“At that stage the company will be in a position to share its plans and consult with stakeholders about those plans, before seeking official approval to proceed with proposed activities. The company will adhere to its commitments to the government of Botswana.â€
Makoba, who joined the company from Government Enclave, said REB has not yet initiated regulatory EIA stakeholder consultation in Botswana and will do that once the EIA process begins. He said EIA, its findings, content and ultimately any regulatory approval will dictate the timeline of exploration activity that follows.
According to Makoba, REB will also conduct a comprehensive engagement process with communities and other stakeholders in Botswana, noting that when the plan for exploration activities in Botswana is known, teams will be put in place devoted to environmental and social monitoring, community engagement and ESG, which will be compatible with Botswana’s Vision 2036 pillars.
PROJECT STATUS IN BOTSWANA
REB’s work to date has been focused on gathering and interpreting data and the company currently has no on the ground operations in the licence area in Botswana as it is in the very early stages of initial analysis.
Following an EIA and stakeholder consultations, regulatory approval is required if REB seeks to conduct further exploration work on the ground.
Approved exploration activity will initiate with seismic surveys. Seismic surveys use above-ground sensors to gather geological data. ReconAfrica’s low-impact seismic surveys involve lightweight, low-frequency equipment travelling on roads and tracks. The seismic vehicles, which are the size of a standard tractor, operate only in the daytime to minimise disturbance and impacts on residents and wildlife.
The company said it is committed to hiring locally and nationally whenever possible. This includes opportunities for technical, skilled and unskilled Batswana contractors and personnel.
“The work program attached to REB’s licence mandates a prescribed amount of local, regional and national hiring and spending on goods and services in Botswana. We will fulfil that commitment and likely to exceed the mandated quota during our exploration program,†Makoba said.
Scot Evans, CEO of ReconAfrica, previously said ReconAfrica believes that the region’s stable energy industry can be developed in an environmentally and socially responsible manner.
“REB is exploring in Botswana at the invitation of the national government. We are committed to working closely with, and under the direct oversight of, the government, as well as regional and traditional authorities, as we continue to comply with relevant laws and regulations throughout all the stages of our operation – including addressing environmental and social concerns,†he said.
The Rencon Africa Kavango basin has faced criticism from climate activists, who believes that it will have negative impact on the environment, and are not in favour of fossil fuels.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.