Jwaneng Mine, the world’s richest diamond mine by value, owned and operated by Debswana, has achieved impressive revenue figures, demonstrating resilience, quality diamond recoveries and sales even in the mist of subdued global diamond markets.
This was revealed by the General Manager of Debswana Jwaneng Mine Mr Koolatotse Koolatotse when giving a business update to members of the media this week.
KK, as profoundly known in the mining corridors revealed that from January to September 2023, Jwaneng Mine registered 21 % revenue growth, beating the market trends of declining sales.
“By the time the markets started going down significantly we had already made money, of course the markets are now down, so from October to end of the year our 21 % revenue growth figure will go down, but we still expect to end the year on a positive figure,” he said.
Jwaneng Mine is the fulcrum and golden goose of Botswana economy and De Beers Group, accounting for over 70 percent of Debswana revenue.
The General Manager Koolatotse said the slowing down of global diamond markets is not a new thing and it is normal. “Markets are part of the diamond industry’s operating environment, having subdued markets from time to time is part of what we plan for, we had a downturn in 2009, another one in 2015, then again in 2020 and 2021 due to COVID”.
“So the going up and down of the consumer markets is not a new thing, it is normal in our business and we are not shocked as Jwaneng, there are seasons in the diamond business, it’s a cyclic industry and we are well adjusted, we know the markets will come back, we know how to respond and how to conduct ourselves in terms of spending and containing costs” he said.
The Jwaneng GM said the operation will not be cutting down on production because of subdued markets. “We will not be reducing production, we are going to stockpile, even in 2021, right in the middle of COVID Delta variant Jwaneng was the only mine in the Anglo American and De Beers Group that made its targets, because we realised that we have a responsibility to take care of the nation as the anchor of the economy”
Koolatotse added that natural diamonds are here to stay and there is a clear distinction between synthetics which are lab grown and natural diamonds that are formed over 3 billion years ago.
“They have different customers, the people who buy natural diamonds know why they buy the naturals, because they are rare, and they are sentimental, it’s about feelings and emotional attachment, it’s about love and people who buy our diamonds understand this perception, we believe that consumers will continue to buy natural diamonds, synthetics have just provided an alternative, but I don’t believe synthetics will steal our customers no”
REACHING CASH SAVINGS TARGET
In terms of cost containment, the Jwaneng General Manager revealed that the mine has surpassed its Big Harry Audacious Goal (BHAG) target of saving P3.5 billion during the period of their ODOT 2024 strategy.
The BHAG Cash efficiency is part of the Debswana 2024 strategy launched in 2019 where the company set an ambitious target of retuning additional P10 billion to shareholders from cash efficiency and cost containment.
“In June 2023 we clocked the P3.5 billion that was set for us, Orapa was given a target, and our Debswana Corporate Centre in Gaborone also had a target, making a total of P10 billion, here in Jwaneng we have surpassed our set target even before we get to 2024, we are now at P3.7 billion”.
SUPPORTING CITIZEN BUSINESSES
Koolatotse also revealed that all services in Jwaneng mine are provided by Batswana companies. “Our services are supplied by citizen companies, all of them, 100 percent, that was part of our phase one approach to say all the services in the mining should be given to Batswana companies, from mining, drilling, conveyor belts, crushing, all of them are Batswana companies today”
He further explained that the next phase will now be to make sure that their products and raw materials are made in Botswana. “When we now start to manufacture as a country, making all these inputs and raw materials in the country, thousands of jobs will be created, and we have started Oxygas in Selebi Phikwe , HDP pipes that transport slurry here in Jwaneng Mine are manufactured in Taung, Ramotswa , flocculants that we use here are manufactured in Francistown and more is coming”
JWANENG’ S GENDER DIVERSITY & INCLUSION
In terms of supporting women empowerment and ensuring gender equality in the mining environment Koolatotse said Jwaneng is well on track. “We made a decision that within our strategy we are going to empower hundred (100) women into better income generating paths, we realized that 100 percent of people who clean and make tea in this mine are women, and we made a decision that we are going to train all of them on machines” he said.
“To date we have trained nighty (91) of them on machines and earth moving equipment operation, when you transform the life of someone who was a cleaner into operating the largest machine in the world, their salary grow 10 folds, we are very decisive about these initiatives and we have results to show for that, over thirty (30) of those females are already in the mine absorbed by Debswana and Naledi , operating different machinery and mining diamonds, from a cleaner to a dump truck operator, this is Gender Diversity & Inclusion at its best and we are very deliberate and decisive about it”
EMPLOYING DIFFERENTLY ABLED PEOPLE
Koolatotse said Jwaneng Mine is also very intentional in supporting people living with disability. “Here in Jwaneng we don’t call them disabled, we call them differently abled people because as we move forward and digitise our mine, we are moving into smart mining and we employ the brain, we are not employing hands, if you can speak and you have a brain you are enough”
“This year the idea was to employ hundred (100) differently abled people in Jwaneng, and before Christmas we would have achieved that, currently we have eighty-four (84), eleven (11) of which are virtually impaired and thirteen (13) are on wheel chairs, and they will also help us transform the mine and make it conducive for differently abled people to work in our operation”.
Koolatotse said, Debswana as the largest private sector employer in the country will soon open internship jobs for mining and engineering graduates in large numbers.
“We want to create a feed of human capital skills so that we can even export some of them to other countries, a lot of graduates from UB and BIUST are idling in the streets, so we are going to take a lot of them into our internship program, to train them and give them real experience,” he said.
Botswana financial sector safe despite high unsecured household loans – IMF
Botswana’s financial sector has been deemed safe and resilient by the International Monetary Fund (IMF), despite the presence of high levels of unsecured household loans. The IMF’s 2023 report on the country’s financial sector highlights the robustness of Botswana’s banking system and its ability to withstand various shocks.
According to the report, credit risk is the largest risk in Botswana’s banking system, with a significant portion of total assets comprising loans concentrated in the household sector. Specifically, 70 percent of bank loans to households in Botswana are personal loans, primarily in the form of unsecured consumer credit. However, the IMF notes that a large share of lenders collect repayments through direct salary deduction, resulting in a generally low level of non-performing household loans.
The IMF’s assessment confirms that most banking entities in Botswana have strong capital buffers, which would enable them to survive even in the event of an increase in non-performing loans in the household sector. While a 20 percent transition of performing loans into non-performing loans would result in some banks experiencing a significant capital shortfall, the majority of banks possess robust total capital buffers and would remain unaffected by severe shocks to household loans.
Furthermore, the IMF team conducted Bank Solvency Stress Tests, which demonstrated that Botswana’s banking system remains profitable and resilient to severe macro-financial shocks. The stress tests revealed that the aggregate capital depletion in an adverse scenario is relatively small, amounting to less than 0.02 percent of GDP. Although credit risk increases significantly under the adverse scenario, the impact on the capital ratio from rising non-performing loans is outweighed by the increase in net interest income.
The IMF’s assessment also indicates that Botswana’s financial sector weathered the Covid-19 pandemic well. The authorities have made notable progress in strengthening financial supervisory and regulatory frameworks since 2007. The financial sector is deemed stable, sound, and resilient, with risks primarily related to banks’ high concentration of short-term deposits from retirement funds and insurance companies, volatility in diamond prices, geopolitical developments, and tightening global financial conditions. However, the financial system remains resilient to a wide range of shocks associated with these risks, although some vulnerabilities exist.
The Financial Stability Council (FSC), a statutory body led by the Governor of the Bank of Botswana, also recently affirmed the resilience and safety of the domestic financial system. The FSC’s assessment found that the financial sector in Botswana is robust, safe, and unconstrained in providing a range of financial services to support the economy. This resilience is attributed to strong capital and liquidity buffers, profitability, continuous innovation and adaptability, and a robust regulatory environment. The FSC believes that the macroeconomic environment, characterized by positive economic growth, well-managed government fiscal position, and modest inflation, further supports financial stability. Stress tests conducted on banks validate their strong solvency and resilience.
IMF concludes that Botswana’s financial sector remains safe and resilient, despite the presence of high levels of unsecured household loans. The IMF’s assessment highlights the strong capital buffers of banking entities, their ability to withstand shocks, and the overall stability of the financial system. The country’s financial sector has also demonstrated its resilience during the Covid-19 pandemic. The Financial Stability Council further affirms the safety and effectiveness of the financial system in providing financial services to support the economy.
Botala Energy debuts on the BSE
Botala Energy, an Australian energy company, recently made its debut on the Botswana Stock Exchange (BSE), joining a growing number of energy development companies trading on the exchange. The company, established in 2018, is focused on exploring and developing natural gas and renewable energy opportunities in Botswana, particularly in the Serowe Gas Project and Solar Opportunities.
The listing of Botala Energy on the BSE was welcomed by Mr Tsamatse Mamola, the Head of Listings & Tradings at the exchange. He recognized the company as a pioneering force in the field of gas exploration and development. Mamola also highlighted the company’s commitment to clean energy production, which aligns with the global movement towards sustainable practices. By harnessing the potential of coal bed methane in the Serowe Project and integrating it with solar power generation, Botala Energy is not only innovating in the energy sector but also contributing to a greener and more sustainable future.
Mamola emphasized the significance of Botala Energy’s decision to list all of its issued shares on the BSE. This move demonstrates the company’s confidence in the exchange as a strategic partner in its corporate journey. The listing provides Botala Energy with access to diverse sources of capital, which will be instrumental in advancing its exploration and development projects, fostering technological innovation, and achieving its clean energy production goals. The BSE, as a facilitator of capital raising, plays a crucial role in supporting ambitious initiatives and fostering growth.
The listing of Botala Energy also brings benefits to the broader Botswana economy. It increases investor interest, contributing to the liquidity and vibrancy of the market. Botswana, traditionally reliant on diamonds, recognizes the importance of diversifying its economic base. The inclusion of a dynamic and forward-looking company like Botala Energy on the exchange reflects the evolving economic landscape of the nation.
In the pursuit of economic diversification, the Botswana Stock Exchange serves as a bridge connecting visionary companies with investors who share their commitment to progress. By providing a marketplace for a diverse range of industries, from traditional sectors to emerging technologies, the exchange becomes a catalyst for economic resilience and sustainability.
Peter Grant, the Non-Executive Director of Botala Energy, shared some insights into the company’s operations. Since commencing exploration in Botswana, Botala has made significant progress, drilling exploration wells and pilot production wells. The company expects to become a modest producer of commercial gas within 12 months and increase production rapidly. Botala Energy has independently certified gas reserves and prospective resources within its project area, which have the potential to supply significant amounts of gas for power generation.
Grant also mentioned Botala Energy’s focus on delivering Liquefied Natural Gas (LNG) to off-grid communities, providing them with reliable and affordable electricity and gas. The company is exploring the commercial option of establishing an Energy Hub and Industrial Park near Palapye, where it aims to produce energy for Botswana and export it to neighboring South Africa. Additionally, Botala Energy plans to establish a solar/gas hybrid plant in Serowe to feed into the local grid, in collaboration with the Ngwato Development Trust.
Market analysts say the listing of Botala Energy on the Botswana Stock Exchange marks an important milestone for the company and the energy sector in Botswana. It provides the company with access to capital, fosters economic growth and diversification, and contributes to the global movement towards sustainable energy practices. Botala Energy’s innovative approach to gas exploration and development, combined with its commitment to clean energy production, positions it as a key player in shaping a greener and more sustainable future for Botswana.
Beverages dominate Botswana’s food imports
Beverages dominate Botswana’s food imports for August 2023, according to the latest figures released by Statistics Botswana. The country imported beverages, spirits, and vinegar worth approximately P332 million during this month. This is a significant increase from the previous month, where the food import bill slightly rose from P1,063,990,477.2 in July 2023 to P1,233,702,300.4 in August 2023.
The total imports for Botswana in August 2023 were valued at P6,995,115,623.2, compared to P6,897,364,155.2 recorded in July 2023. Food imports accounted for 15.9 percent of this amount, contributing P1,233,702,300.4. Among the food items imported, beverages, spirits, and vinegar accounted for the majority at 26.9 percent. Cereals and sugars followed with 13.4 percent and 8.8 percent, respectively.
Within the category of beverages, spirits, and vinegar, the most imported commodities were mineral waters and aerated waters containing sugar or other sweetening matter or flavored, contributing 47.0 percent. Beer made from malt accounted for 16.7 percent, while fermented beverages and non-alcoholic beverages accounted for 15.9 percent. The import bill for beverages, spirits, and vinegar shows that the country imported mineral waters and aerated waters containing added sugar or other sweetening matter or flavored worth approximately P156 million. Beer made from malt accounted for around P55 million, while fermented beverages and non-alcoholic beverages were valued at around P79.1 million. Wine and liqueurs and cordials were also imported, with values of P12.6 million and P6.4 million, respectively.
In terms of cereals, dried maize excluding seed and other wheat and muslin accounted for 42.3 percent and 27.4 percent, respectively. Rice imports contributed 21.2 percent. The country spent approximately P165 million on cereal imports, with dried maize accounting for around P70 million, wheat around P45 million, and rice around P44.7 million.
Other food imports included preparations of cereals, flour, starch, or milk; pastry cooks’ products, which amounted to around P89 million. Preparations of vegetables, fruit, nuts, or other parts of plants accounted for around P88 million, while sugars and sugar confectionery were valued at around P108 million. Miscellaneous edible preparations, animal or vegetable fats and oils, dairy produce, prepared animal fodder, coffee, tea, and spices, fruits and nuts, meat, vegetables and certain roots and tubers, and products of the milling industry such as malt, starches, and wheat gluten were also imported, with values ranging from P13 million to P74.6 million.
In conclusion, beverages, particularly mineral waters and aerated waters containing sugar or other sweetening matter or flavored, dominate Botswana’s food imports for August 2023. The country also imports a significant amount of cereals, sugars, and other food products. These figures highlight the country’s reliance on imported food items and the need for strategies to promote domestic production and reduce dependence on imports.