Botswana’s GDP rose to P70 billion
Business
The latest figures released by Statistics Botswana this week show that Botswana’s nominal Gross Domestic Product (GDP) for the second quarter of 2023 was P70, 271.8 million (around P70 billion) compared to P66, 941.3 million (around 66.9 billion) registered during the first quarter of the same year.
According to the figures mining & quarrying sector remained the major contributor to Botswana Gross Domestic Product (GDP) during the first quarter of 2023.
The statistics show that during the quarter under review, mining & quarrying contributed 21.9 percent to GDP. Mining production recorded growth, following an increase in diamond and copper production. The figures show that the increase in the real value added of mining and quarrying, was mainly influenced by the increase in the copper and diamond real value added by 66.7 and 6.3 percent respectively. According to the figures, diamond production increased by 6.2 percent (346 thousand carats) from 5,576 thousand carats during the second quarter of 2022 to 5, 922 thousand carats during the period under review. On the other hand, quarter on-quarter analysis shows that production decreased by 15.3 percent (1,067 thousand carats) during the second quarter of 2023 compared to 6, 989 thousand carats recorded during the first quarter of 2023.
“Diamond production in carats increased by 6.2 percent in the second quarter of 2023. Furthermore, the stabilization in the production at Khoemacau Copper Mine (KCM) has contributed to the growth in copper concentrates export by 44.5 percent in comparison with the corresponding quarter of previous year. Copper in Concentrates increased by 50.9 percent (5,408 tonnes) from 10,619 tonnes registered during the second quarter of 2022 to16, 027 tonnes during the period under review. The quarter-on-quarter analysis also shows that production increased by 7.8 percent (1,155 tonnes) during the second quarter of 2023 compared to 14, 872 tonnes produced during the first quarter of 2023.”
Salt production increased by 32.6 percent (17, 657 tonnes), from 54, 124 tonnes during the second quarter of 2022 to 71, 781 tonnes during the quarter under review. On the other hand, quarter-on-quarter analysis shows that salt production decreased by 22.1 percent (20, 326 tonnes) from 92, 107 tonnes registered in the first quarter of 2023.
Silver production increased by 55.4 percent (4, 178 kilograms) from 7, 542 kilograms in the second quarter of 2022 to 11, 720 kilograms in the period under review. The quarter-on-quarter analysis shows that production decreased by 6.9 percent (862 kilograms) during the second quarter of 2023 from 12, 582 kilograms produced during the first quarter of 2023.
The quantity of Soda Ash produced during the second quarter of 2023 was 45,502 tonnes while Gold extracted during the second quarter of 2023 stood at 105 kilograms. Coal produced during the second quarter of 2023 stood at 470, 878 tonnes.
Statistics Botswana stated that as the major contributor to GDP, the mining sector was followed by Public Administration & Defence at 15.5 percent, Wholesale & Retail at 10.8 percent and Construction at 10.1 percent. Public Administration and Defence includes activities of Central and Local Government together with Extra Budgetary Bodies (Parastatals) which organize and finance the provision of goods and services to individual households and the community at large while Wholesale & Retail deals with the sales of fast moving consumer goods. The construction industry comprises of buildings construction, civil engineering and specialized construction activities.
In the quarterly update on Gross Domestic Product in Botswana, the statistics entity noted that the Finance, Insurance and Pension Funding industry registered a growth of 7.6 percent compared to 2.2 percent registered during the same quarter in 2022. The industry comprises of Central Banking activities, Monetary Intermediation & Financial Services, Insurance & Pension Funding and Financial & Insurance auxiliary services. Central Banking, Monetary Intermediation & Financial Services and Insurance & Pension Funding showed improved performance by recording 14.9, 8.7 and 3.9 percent respectively during the second quarter of 2023.
Accommodation and Food Services real value added rose by 5.4 percent in the second quarter of 2023 compared to an increase of 4.5 percent registered in the same quarter of the previous year.
Real Estate industry registered an improved growth of 5.1 percent compared to 3.0 percent recorded in the same quarter of the previous year. The industry includes the activities, Owner Occupied Dwellings and Real Estate Services. Households that own the dwellings they occupy are formally treated as owners of unincorporated enterprises that produce housing services consumed by those same households. Real estate services include buying, selling, renting, and operating of self-owned or leased real estate, such as apartment buildings and dwellings, Non-residential buildings, including exhibition halls, self-storage facilities, malls, shopping centres etc.
Administrative Support and Services Activities real value added increased by 4.9 percent in the second quarter of 2023 compared to a growth of 3.0 percent registered in the same quarter of the previous year. The enhanced performance in the industry, according to Statistics Botswana is attributed to Other Administrative & Support Services and Travel agents, Tour operators and related activities which increased by 5.1 and 4.7 percent respectively. “The growth in the tour operators industry is driven by the increase of international and domestic passenger movements by 12.6 percent witnessed during the quarter under review. It comprises of Renting activities (renting and leasing of vehicles, renting of machinery and equipment, renting of personal and household goods etc.), Employment and Human Resource Activities, Private security and investigation activities, Cleaning and landscaping services, Business support activities. The industry also includes Travel agency activities, Tour operator’s activities and Other Reservation Services and Related Activities.”
Transport and Storage value added increased by 4.6 percent in the second quarter of 2023, compared to the 4.3 percent recorded in the same quarter of the previous year. “The growth of the industry emanates from the favorable rise in real value added of Rail transport and Air Transport by 16.4 and 12.6 percent respectively, during the quarter under review.”
Professional, Scientific and Technical Activities real value added increased by 4.5 percent in the second quarter of 2023 compared to a rise of 3.8 percent registered in the same quarter of the previous year. Professional, Scientific and Technical Activities includes Legal activities, Accounting, Bookkeeping & Auditing activities, Management consultancy activities, Architectural & engineering services, Research & experimental development, Advertising & Marketing, specialized design and photographic activities and Veterinary activities.
The Education sector increased by 3.9 percent in real value added versus a rise of 1.0 percent during the corresponding quarter of 2022. This Includes both public and private education activities e.g. pre-primary & primary education, General secondary education, Technical & vocational secondary education, Higher education etc.
The Information and Communications industry recorded a growth of 3.7 percent in real value added for the second quarter of 2023, compared to an increase of 7.1 percent registered in the corresponding quarter of 2022. The ICT industry comprises of Publishing including motion pictures, etc. and printed matter, Radio & Television Broadcasting, Telecommunications services and Computer Programming & Information Services activities. Telecommunications real value added increased by 3.9 percent during the quarter under review.
The Manufacturing industry during the second quarter of 2023 recorded a growth of 2.9 percent in real value added compared to an increase of 9.4 percent registered in the corresponding quarter of 2022.
“The rise in the industry is attributed mainly to the favorable growth in the sub-industries of Production, processing and preserving of meat and meat products, Manufacture of beverages & tobacco and Dairy products, by 11.0, 9.1 and 7.8 percent respectively.”
The Health sector rose by 2.7 percent in real value added compared to a 3.5 percent increase during the corresponding quarter of 2022. It includes both public & private health and social work activities e.g. Hospital activities, medical & dental practice activities, and human health activities. Public Health is mainly the Department of Health Services Management.
The Agriculture, Forestry and Fishing industry went up by 1.6 percent in real value added during the second quarter of 2023, relative to an increase of 4.3 percent registered in the same quarter of 2022. “The overall performance was mainly due to the increase in real value added of crop farming & horticulture and livestock farming by 1.3 and 2.0 percent respectively. “The growth in the Livestock farming sub-industry was attributable to the increased number of cattle marketed during the quarter under review. Cattle sold to Botswana Meat Commission registered a significant growth of 13.7 percent.”
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
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.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
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.
Business
BPC Signs PPA with Sekaname Energy
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.