Botswana has experienced a serious resurgence of mining activity in the country over the last couple of years, with more discoveries announced almost every month.

Earlier this year, the Botswana Minister of Finance and Development Planning, Baledzi Gaolathe, stated that the minerals sector of the country was flourishing. He added, “exploration for a wide variety of minerals is active and several new minerals projects were launched during last year.”

Discoveries AND Projects in progress
The headquarters of the Diamond Trading Company (DTC) in Botswana is at an advanced stage of construction and should be fully licensed during this calendar year.

Botswana’s DTC is a joint venture between the government and diamond giant De Beers. As the rough diamond distribution arm of the De Beers family of companies, the DTC sorts, values and sells about one- half of the world’s rough diamonds.

Based mainly in the traditional cutting centres of Antwerp, Tel Aviv, Mumbai, Johannesburg, and New York, the company has now come to an agreement with the Botswana government to sell $360-million worth of rough diamonds to local gem cutters.

Diamond cutting licences have been issued to 16 companies and the expectation is that through the agreement, the DTC will be able to supply the local market with an estimated 3 000 job opportunities by the end of 2008.

The DTC’s diamond distribution channel creates unrivalled access to the diamond pipeline for producers, and is a key generator of sustain- able revenues. In addition, the DTC engages in a range of activities that aim to improve local capabilities in line with the economic objectives of its producer partners.

These activities are helping to support the establishment of a sustainable, integrated diamond industry within producer countries like Botswana, and to further the wider economic goals of such governments. Activities include skills development, and assistance with diversification initiatives beyond diamonds.

Also, Canada-based diamond explorer and developer Diamondex has started mining operations in Botswana. Diamondex is scheduled to start diamond production this year at Lerala.

Meanwhile, the Aim- and BSE-listed diamond exploration company, African Diamonds (AFD), has reported discoveries at its AK6 project near Orapa, and has submitted an application for a mining licence to the Botswana government.

Mining is scheduled for the last quarter of 2009.

AK6, jointly owned by De Beers, AFD and Debwat, which is a venture between De Beers Prospecting Botswana and a private Botswana company, Wati Ventures, is pro- jected to ramp up to full production in 2011 or 2012, and is estimated to produce up to one-million carats a year of high-value gem-quality diamonds.

The country is also making some progress in its efforts to promote beneficiation of minerals produced in Botswana. The Botswana government decided on a tax agreement with the Botswana metal refinery, Activox. Under this agreement, the copper and nickel ore will be pro- cessed in Botswana to finished copper and nickel cathodes.

Gaolathe said that some of the challenges of the beneficiation programmes are increasing construction costs, long lead times, and a shortage of skilled labour.

However, Gaolathe commented that, on the brighter side, the project has, to date, engaged nine companies, five of which were Botswana-based companies, to undertake the beneficiation activities.

“At present, 660 personnel are engaged on the project site, of whom 571 are Batswana. It is expected that during the course of this year, when project activities peak up production, over 4 000 people will be employed by the project,” he stated.

Meanwhile, the giant mining company, Debswana, is planning to construct a third plant at Orapa and start underground mining at Jwaneng mine.

Debswana is a joint venture between the government of Bo-tswana and De Beers; each party owns 50% of the company. Debs-wana operates four diamond mines in central Botswana, as well as a coal mine.

ASX-, Aim- and BSE-listed copper and nickel exploring company, Discovery Metals, has also reported more copper deposits at its Maun and Dikoloti projects.

Discovery Metal’s MD Jeremy Read stated in the company’s ASX announcement that the total copper resource of its wholly owned Maun project has increased by 46%, to 46,1-million tons.

Mineral production
The Minister said at the budget speech that the diamond market has become more volatile in recent years. “After a substantial increase in production to 34,4-million carats in 2006, Debswana’s production is expected to have been lower in 2007, by about 761 000 ct,” he stated The coal production at Morupule colliery, owned by Debswana, is also expected to have declined from 962 427 t in 2006, to 832 007 t in 2007.

This is mainly owing to low consumer offtake. A coal washing plant to improve the calorific value of the coal was constructed and commissioned in January this year.

Goalathe said that the plant will provide an opportunity to expand production and exports of coal to Botswana’s neighbouring countries. However, the budget did show a significant increase in production in other minerals such as gold, copper, nickel and salt.

Economic growth

Botswana’s economy expanded by 6,2% in the fiscal year to June 2007, while average inflation slowed to 7,1%.
Goalathe stated that the growth in Botswana’s national accounts can be attributed to both the mining and the nonmining sectors.

The mining sector had a growth increase of 1,4%, from 3,8% to 5,2%. The nonmining sector accelerated from 3,9% to 6,8%.

He also said that a 19% jump in diamond exports helped widen the surplus on the current national account and boosted foreign reserves by $2,3-billion, to $10,2-billion, at the end of November 2007.

The Botswana government is planning to diversify its five-year bond, which is maturing in March this year, by a mixture of maturities across the yield curve.

Botswana’s mining history
At independence from Britain in 1966, mining activity in Botswana was negligible, comprising small-scale quarrying only.

Operations to extract asbestos and manganese had ceased just prior to independence while gold-mining, once the cause of settlement in north-east Botswana, was moribund.

The orebody that was to form the basis of the copper/nickel-mining industry was discovered as early as 1963, and prospecting for diamonds that had been taking place since the mid-1950s led to the discovery of the large kimberlite deposit at Orapa, in April 1967.

Today, Botswana’s mining policy aims to strike a balance between making the best use of the economic benefits for the country, while allowing investors to earn competitive returns. In order to foster private-sector investment in the mining sector, government con- tinues to carry out airborne geophysical data collection.