Copper and silver mining in Botswana have the potential to become a much bigger economic comodity than diamonds if what Minister Ponatshego Kedikilwe said at the just ended Botswana Resource Sector Conference is anything to go by.
The Minister also added that he saw huge potential in Botswana’s 200-billion-ton coal endowment, especially in its possible use in coal-to-liquids transport fuels and chemicals.
The Botswana government, which is a 50% shareholder in large ageing diamond mines, is in a race against time to find diamond revenue replacements. Coal development, which has regularly been featured at the yearly Botswana Resource Sector Conference as an upcoming substitute for diamond revenue, was joined at this week’s conference by the promise of Botswana’s Kalahari Copperbelt, which is being dubbed Africa’s newest copper/silver mining province.
The conference heard that Botswana’s copperbelt shares similarities with the copper endowments of the Democratic Republic of Congo and Zambia. “It’s quite clear that Botswana’s an emerging copper/silver province of significant scale in a favourable geological setting,” says ASX-listed MOD Resources Managing Director Derek Byrne. The ASX- and Botswana Stock Exchange (BSE)-listed Discovery Metals has emerged as the belt’s first copper/silver miner and TSX- and BSE-listed Hana Mining and the ASX-listed MOD Resources are on the way to joining it.
Market response to Discovery Metals’ performance has been a seven-fold uplift in its share price. Meanwhile, Kedikilwe declined, in interviews on the sidelines of the Botswana Resource Sector Conference, to say whether or not the government would be taking up its option to increase its shareholding in De Beers, from the current 15% to 25%.
Diamond mining accounts for 41% of Botswana government revenue and 32.3% of gross domestic product, which has prompted the government to adopt an economic diversification drive.“In Botswana’s case, the immediate concern is how to lessen the country’s heavy dependence on diamonds.
“We aim to entice, to lure and to goad companies to search for nondiamond minerals,” the Minister says.
The global financial meltdown saw Botswana’s diamond production plummet to 17.7-million carats in 2009 from 32.6-million carats in 2008 and employment in cutting and polishing fall from 3 267 in 2008 to 2 183 in 2009, rising back to 3 297 in the first quarter of 2012.
The Botswana government will be buying 10% to 15% of the production of Debswana and selling those diamonds itself through the Okavango Diamond Trading Company as a verification exercise.
“To us, that leverage is extremely important because we won’t be depending solely on De Beers to do the marketing,” he adds.
The government is developing a mining investment company that will manage its investment in mineral resources on a daily basis.