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Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana
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Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana

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Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana …

Republic of Botswana: State of the Mineral Industry and Investment Opportunities in Botswana

Hosted by Tiyapo Hudson Ngwisanyi, CEO, Geological Survey

Mining On Top: Africa - London Summit
24-26 June 2014 | London

Published in: Business, Technology
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  • 1. MINING ON TOP: AFRICA-LONDON SUMMIT, June 2014 0 STATE OF THE MINERAL INDUSTRY AND INVESTMENT OPPORTUNITIES IN IN BOTSWANA Tiyapo Hudson Ngwisanyi Director Department of Geological Survey Ministry of Minerals, Energy and Water Resources
  • 2. Pre Independence Era 1
  • 3. 2 Botswana : at a glance impressive track record of good governance and economic growth supported by prudent macroeconomic and fiscal management,  At the centre of Southern Africa & SADC region Area: 582,000 sq. km. Population (2011): 2.031 million. Nominal GDP (2012): $14.50 billion. Real GDP growth rate (2012): 4.2%, (2011): 6.1%. Per capita nominal GDP (2012): $7,650 . Natural resources: Diamonds, copper, nickel, coal, soda ash, salt, gold. Sources of Government Revenue SACU largest share (34%) in 2012/13, first time since 1970’s, Mineral’s share declining: fell from 48% in 2006/07 to 29% in 2012/13
  • 4. INTERNATIONAL RANKINGS • Corruption Perception Index – Transparency International (30/177) 2013 • The Global Peace Index – Vision of Humanity (32/162) 2013 • Mining Report – Fraser Institute (17/93) 2011/2012, (24/112) 2013 • Index of Economic Freedom- Heritage Foundation/WSJ (30/185) 2013 • World’s Best Countries Index- Newsweek • The Global Enabling Trade Index- World Economic Forum (54/132) 2012 • Doing Business Report (World Bank) 2013 Rank =65/189, 2014 Rank = 56 • Democracy Index- Economist Intelligence Unit (33/167) 2011 • Human Development Index- UNDP (118/187) 2011 • Global Competitiveness Index- World Economic Forum (66/133) 2013 • Credit Ratings - Moody’s (A2) 2013 • Credit Ratings - Standard and Poor’s (long term: A-, short term: A-2) 2013 • Mo Ibrahim Index of African Governance (2 /52) 2012, (2/52) 2013 3
  • 5. Uncertainty concerning existing regulations 4 Fraser Institute – Survey of Mining Companies 2013
  • 6. 1. Maximize the economic benefits for the nation while enabling private investor to earn competitive returns. – We fully appreciate the concept and practice of internal rate of return in that enterprises are not charitable organisations but adapt corporate social responsibility policies as they thrive. – We have no restrictions on the repatriation of profits because there are no exchange controls. – Low level of taxation and – prudent economic management by Government. 2. Create a competitive environment to stimulate private sector investment in mineral exploration and exploitation. – Geological data from previous exploration work freely availably at the National Geoscience Information center 5 Minerals Policy Objectives
  • 7. 3. Encourage linkages with the rest of the economy to expand value addition activities. – Where economically feasible beneficiation and downstream activities should be done in Botswana to facilitate economic diversification, e.g for diamonds we attracting companies to relocate to Botswana to cut and polish, provide support service and trade polished and rough diamonds in order to create a diamond trading centre which will out-live the mining operations. – Suppliers of consumables such as chemical reagents for processing plants and equipment spares are encouraged to setup businesses in the country. 4. Generate employment and training for Botswana’s citizens 6 Minerals Policy Objectives
  • 8. 5. Safeguard the environment – mining operations are required to operate in accordance with good mining industry practice, to preserve in as far as is possible the natural environment, minimize and control waste or undue loss of or damage to natural and biological resources. 7 Minerals Policy Objectives
  • 9. Investment Climate  Political stability  Safety and security  Corruption  Top sovereign credit rating  Foreign exchange policy  Stable inflation  Taxation  Information and communication technology (ICT)  Infrastructure  Enforcing contracts  Trading across borders 8
  • 10. Mineral Investment Climate • Favourable Geological Environment • Progressive Mining Code • Simplicity and Predictability of Mineral Legislation • Security of Tenure • Commitment to Customer Satisfaction • PPP 9
  • 11. EXPLORATION INTEREST IN BOTSWANA • There are currently >1000 PLs for all minerals • Though exploration expenditure has declined from the 2007 levels there are signs of recovery • PL overlaps allowed • PL map (all) 10
  • 12. Availability of Geodata The Department of Geological Survey is the custodian of all geoscience data collected in Botswana By Government Exploration companies Researchers • Analogue • digital 11
  • 13. Geological Data 1:1,000,000 Geological map (entire country) 1:250,000 (western Botswana) 1:125,000 (QDS) (eastern Botswana) 12
  • 14. GEOPHYSICAL DATA • Reconnaissance aeromagnetic survey at 4km and 1km line spacing • Detailed high resolution aeromagnetic and radiometric surveys at 200 – 250m line spacing • Private sector surveys at 50 – 100m line spacing • Radiometric data covering eastern Botswana • Gravity - countrywide 13
  • 15. GEOLOGICAL CONTEXT • Oldest rock masses in Botswana constitue the Archaean age “basement” which crop out only in the east of the country • Subdivided into Kaapcaal Craton, Zimbabwe Craton and Limpopo Belt • Composed mainly of granitoid lithologies • Also presence of Archaean igneous intrusions (Kanye Volcanic Formation, Gaborone Granite, etc) • 75% of Botswana’s surface is underlain by Phanerozoic successions of the Karoo Supergroup and Kalahari beds 14
  • 16. 15 Structural Provinces & Tectonic Units Carney, Aldiss & Lock, 1994 Kaapvaal craton Zimbabwe craton Kaapvaal craton Zimbabwe craton Kaapvaal craton Kaapvaal craton Zimbabwe craton Zimbabwe craton Ma Lithostratigraphic units Period Era Eon 1.8 Kalahari Quaternary Cenozoic 65 Kalahari Tertiary 144 kimberlites Cretaceous 203 Karoo Supergroup Jurassic 250 Karoo Supergroup (+kimberlite) Triassic Mesozoic 298 Karoo Supergroup Permian 354 Karoo Supergroup Carboniferous 416 Devonian 440 Silurian 495 Ordovician 545 kimberlite Cambrian Palaeozoic Phanerozoic 1000 Ghanzi – Chobe - Okavango Late 1600 Otse – Waterberg – Palapye (+kimberlite) Mid 2050 Olifantshoek – Okwa - Gweta Early Proterozoic 2650 Transvaal Supergroup Vaalian 3100 Witwatersrand Randian 3600 Barberton - Kraaipan Swazian Archaean
  • 17. 16 Kaapvaal craton Zimbabwe craton 1.3% Cu – 131Mt, 3%-Pb-Zn-25Mt, 3.5Mt-Ag stratabound Cu-Ag at Ngwako Pan minor Cu-Au, mica & Sn in Zimbabwe Metals Potential Gold in greenstones 2.4%-Ni/Cu in basic magmatic rock Ni/Cu in basic amphibolite- 30Mt Gold in greenstones Transvaal Super group Stratabound Iron & Manganese Molopo Farms Complex (Bushveld Complex analogue) Platinum Group Elements
  • 18. Diamond in Kimberlite (various ages) after Norman Lock, 2006 Kaapvaal craton Zimbabwe craton Kaapvaal craton Zimbabwe craton Jwaneng Intra-Karoo (±240Ma) Mabuasehube Mid - Late Proterozoic Martin’s Drift Proterozoic (±1200Ma) Mochudi/ Mosomane Proterozoic (±1200Ma) Tsodilo / Orapa / Gope / Okwa / Kokong Cretaceous (±90Ma) Tsabong / Lekgodi Cretaceous (±90Ma) Sikwane Cambrian (±600Ma) Cambrian (±500Ma)
  • 19. Coal Potential 18 • Botswana has extensive, and largely unexploited, coal resources which when developed can form part of the Government’s effort to diversify the economy. • Known coal resources are of the order of 212 billion tonnes • Current coal mine (Morupule Coal Mine) expanded to produce just under 4.0 mtpa is insignificant in comparison to these resources endowment • The demand for coal-for-energy has increased significantly nationally, regionally and internationally
  • 20. Options for utilisation of Botswana coal • Coal exports • Domestic power • Export power • Coal-to-liquids • Coal-to-gas • Coal bed methane Fertiliser - Producing nitrogen-based fertilisers from coal, etc. 19
  • 21. 20 Base Metals Industry Review • There are 4 licensed base metal mining operators in Botswana – BCL Limited: Nickel/Copper – Tati Nickel Mining Company: Nickel/Copper – Messina Copper: Copper – Discovery Metals : Copper & Silver • Botswana has been mining copper and nickel for more than three decades on the mineralization in the extensive greenstone belts covering much of the East and North East of Botswana. (BCL Limited Mines and Tati Nickel Mining Company Mines) • The strengthening of copper prices prior to the current global financial crisis has led to renewed interest in the other copper deposits in the North Eastern part of the country as well as those found in the Ghanzi ridge in the west. • Improvement of the road infrastructure in the western part of the country has the potential to increase the prospectively of these deposits.
  • 22. The Enabling Mining Environment for Investment • The Mining Code The Mines and Minerals Act, 1999, the centrepiece of Botswana Mineral Legislation • Mineral rights vested in the State • Law provides for security of tenure and predictability • Virtually an automatic transition from a Prospecting License to a Mining License the Minister shall ensure, in the public interest, that the mineral resources are investigated and exploited in the most efficient, beneficial and timely manner
  • 23. 22 Mineral concessions are required to explore for or mine minerals Four types of mineral concessions Prospecting license Retention license Mining license Minerals permit Legislation
  • 24. 23 Prospecting Licences Duration: not more than 3years Renewals: not more than 2 renewals, each not exceeding 2 years Area ≤ 1,000 km2 per licence Considerations: • Adequate financial resources, Technical competence and expertice • Satisfactory Proposed programme of prospecting operations
  • 25. 24 Retention Licences  Conditions • Feasibility study carried out • Approved prospecting programme completed  Duration: not more than 3 years  Renewal: Once only for a period not exceeding 3 years Mining Licences  Duration of up to 25 years  Renewable for up to another 25 years
  • 26. 25 Mineral Permits For small scale mining operations For any minerals except diamonds Area not exceeding 0.5 km2 per permit Permits for industrial minerals granted to citizens only Duration: not more than 5 years Renewal: for a period not exceeding 5 years at a time
  • 27. 26 Government Investment • No intention for day-to-day management of mining operations • Non-diamond Minerals – Option for a working interest participation of up to 15% • Diamonds – Level of participation reached through negotiations – Negotiations initiated by application for a mining licence – Good faith negotiations, failure not foreseen • Government not a majority shareholder
  • 28. 27 Financials • Royalties - %age of gross market value Mineral Type Percentage – Precious stones 10% – Precious Metals 5% – Other Minerals 3% • Lease rentals – P100/km2 or part thereof
  • 29. Conclusions • Botswana is the investment destination of choice in: – Minerals Prospecting – Mining – Downstream diamond beneficiation – Transportation in mining – Power generation – Transmission infrastructure – Renewable Energy Technologies 28
  • 30. 29 Ministry of Minerals, Energy and Water Resources P/Bag 0018 Gaborone, Botswana Tel: +267-365-6600 Fax: +267-372-738 Permanent Secretary bpaya@gov.bw Deputy Permanent Secretary (Water & Energy) kabi@gov.bw Deputy Permanent Secretary (Minerals) Director of Geological Survey nmmolawa@gov.bw tngwisanyi@gov.bw Contacts

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