Botswana diamond mining holds sparkling potential

Although the Botswana diamond-mining industry is in good shape, as with any industry, it does face its own challenges at both the macro and micro levels.

Teeling notes that the biggest challenges in the diamond- mining industry in Botswana are of a global nature. As the biggest producer by value of dia- monds in the world, Botswana is heavily reliant on a healthy global consumer market and the demand for polished diamonds and jewellery.

However, Botswana also battles with challenges internally, with one of the biggest challenges for the industry being resource management.

“Traditionally, diamond exploration and mining in Botswana have been controlled by diamond-mining and -sorting company Debswana, a partnership between diamond producer De Beers and the Botswana government,” says Teeling.

Recently, smaller players have also been given the opportunity to be part of Botswana’s future by investing in the development of some of the country’s smaller assets that may not be of interest to the diamond industry’s largest player.

“Botswana Diamonds has the opportunity to play a useful role and the company is committed to Botswana, the development of undervalued diamond projects and being a contributor to the country’s future economic stability,” says Teeling.

Botswana is a country that is reliant on the diamond industry, with the industry contributing about one-third of its gross domestic product and 70% of its export earnings. Contributors to the industry are aware that the more diamond exploration and mining success there is, the better it will be for the country and its people.

Further, Botswana aims to become an international diamond hub and it is critical that the beneficiation plans for value addition through diamond sorting, manufacturing, trading and downstream activities are successful.

Teeling believes that Botswana is well aware of the challenges that the country is faced with and that it has demonstrated prudent management of its diamond resources so far.

“The increased level of dia- mond activity, owing to the relocation of the largest supplier of rough diamonds, the Diamond Trading Company, to Gaborone from the UK, will have its desired effect and bring increased economic benefit to Botswana,” says Teeling.

However, the real growth potential lies in the discovery and building of new mines. As it stands, the global rough-diamond industry produces about $14-billion of rough diamonds a year. By the time the diamonds reach the consumer, the industry is worth about $70-billion.

Teeling also notes that the diamond mining industry’s biggest potential lies in the growth of consumer demand in the emerging markets and, once the more traditional markets of the US and Europe are stable, Botswana Dia- monds could be heading for strong industry performance in the medium term.

In Botswana, the first priority must be the development of new diamond exploration and mining projects. The development of the country’s diamond-mining industry has been an economic success story,” says Teeling.

The Botswana government holds a large stake in the diamond-mining industry as it produces the best returns and is where the biggest potential lies.

“However, diamond exploration is not an easy business. Therefore, junior miners are encouraged to become more active in Botswana as there will be opportunities for incremental growth,” he adds.

Even though diamond exploration and mining projects are long-term developments, infrastructure plays an important role in the development of a mining country such as Botswana.

“At present, several transport develop- ment projects are under way or under consideration,” says Teeling.

These include the Kazungula bridge across the Zambezi, which, when completed, will replace the existing ferry linking Botswana and Zambia. Also in progress is the upgrading of the roads linking Francistown and Gaborone with Zimbabwe and South Africa respectively and the trans-Kgalagadi (Kalahari) railway line from Botswana to Namibia.

“The railway line will link Botswana to ports on the West Coast of Southern Africa. The rail link would primarily be geared for coal exports. Other regional rail links under consideration include an eastward link to South Africa through the Mmamabula coal fields, a link to Mozambique through Zimbabwe, and a northern link to Zambia through Kazangula,” he adds.

Meanwhile, State-owned utility Botswana Power Corporation (BPC) is currently in the process of evaluating options for refurbishing the aged Morupule A power plant, near Palapye, to restore output capacity and improve the facility’s reliability.

“The BPC has also installed rented emergency power-generation facilities across the country and is in the process of constructing the Morupule B power plant, due for commercial operation by the end of this year,” concludes Teeling.