Ikongwe Mine, Botswana’s sole iron-ore mining operation, has stopped production due to falling export prices for the mineral, a senior company official said on Wednesday.
The mine, owned by Botswana-registered Vision Ridge Investments, a unit of India's Yashomann Industries, began production in 2021 as prices of iron-ore, the main ingredient in steel production, soared to record highs of $240/t driven by demand in world number one steel producer China.
Iron ore prices on the global market have now fallen to around $100/t due to low steel demand and a sluggish Chinese property market. The low prices have made exports from landlocked Botswana unviable at a time when logistics costs are high.
"We could no longer afford to continue stockpiling when we are not exporting. We tried buying a steel plant currently under liquidation for local beneficiation of our ore, but we have since pulled out of that deal. Plans are underway now to build our own integrated steel-making plant near the mine," Vision Ridge director Chetan Patil told Reuters.
Ikongwe has capacity to produce one million tonnes of iron ore per year, over an initial 10-year life span, with a grade of 65%. The mine made its first shipment to China in September 2021, contributing to Botswana's efforts to reduce its reliance on diamonds.
Although mining's contribution to Botswana's GDP has declined over the years to less than 20% last year, the country is still heavily reliant on precious stones, which account for about 70% of its foreign currency revenues.