Botswana Presentation to Africa Down Under Conference. Minister of Minerals, Energy and Water Resources Hon. Onkokame Kitso Mokaila 29 August 2013

Transcription

1 Botswana Presentation to Africa Down Under Conference Minister of Minerals, Energy and Water Resources Hon. Onkokame Kitso Mokaila 29 August

2 Botswana at a Glance At the centre of Southern Africa & SADC region Liberalised & free market economy security of tenure clear and streamlined licensing procedures, and environmental obligations that relate to international best practice A democratic country with good governance structures Most transparent country in Africa; zero tolerance for corruption Trainable workforce and high adult literacy rate (82%) Good industrial relations 2

3 Investment Climate Botswana continues to receive favourable sovereign risk ratings by both Standard & Poor s and Moody s investment agencies for the general economy, and Fraser Institute of Canada and Resource Stocks in mining Credit rating stands at A Lowest corporate tax rate in the region (15% for manufacturing /financial services, 22% for all other activities) Ranked 17 th overall and number 1 in Africa as a mining destination according Fraser Institute Survey of 2012/13, Also ranked first in the world in the following areas: certainty concerning the administration, interpretation, and enforcement of existing regulations; certainty concerning environmental regulations; and No regulatory duplication and inconsistencies. 3

4 Mining Industry Overview Botswana s modern day mining started in the early 1970 s with diamonds and copper nickel Country s economy dominated by mining, as at end of 2011/12 financial year its contribution was; 23% to GDP About 41% to Government revenue Minerals mined are; diamonds, copper, nickel, coal, gold, soda ash, salt and various industrial minerals 4

5 Feature of Mining Legislation All minerals rights vested in the state- this was negotiated in 1965 Prospecting license issued for initial period of 3 yrs, renewal twice (7yrs total) Retention licence issued for initial period of 3 yrs, renewal once up to 3 yrs. For projects which cannot be mined economically after prospecting Mining license issued for up to 25yrs renewal Progression from Prospecting to Mining Licence is guaranteed provided deposit can be exploited economically in an environmentally safe manner. Botswana is well known internationally for consistency in enforcement of the rule of law, this includes taking difficult decisions such as rejecting applications or cancelling licenses which are not compliant to the law, in particular failure to carryout the approved programme of prospecting. 5

6 80% of the country has been surveyed through a Government funded countrywide airborne magnetic surveys Ngamiland airborne magnetic interpretation Molopo Farms Complex aeromagnetic interpretation Radiometric Eastern Botswana Gravity country wide 6

7 Base metals potential Proterozoic Mineraisation stratabound Copper-silver at Ngwako Pan Pb-Zinc-silver in Aha Hills Zimbabwe craton gold and Nickel Copper Nickel Mineralisation Kaapvaal craton Molopo Farms Complex Platinum Group Elements 7

8 Diamonds Potential Nxaunxau Field 17 Kimberlites 2 of them Diamondiferous Gope Field 6 kimberlites Two of them; Go136 and Go25 are mined Ghaghoo mine Kikao-Khutse Field. About 23 kimberlites Orapa Field About 80 kimberlites Production in Orapa, Damtshaa, Letlhakane and Karowe mines Martins Drift Field 8 kimberlites Lerala mine Okwa Field 8 kimberlites Jwaneng Field 27 kimberlites Jwanenng 02 and 07 kimberlites in production Jwaneng mine Kokong Field 34 Kimberlites Tsabong Field About 50 kimberlites Lekgodu Field 8 kimberlites 8

9 A Case for economic diversification Botswana is heavily reliant on diamond revenues for economic development Diamond revenues are expected to dip significantly post 2030 due to higher stripping ratios and low production rates due deeper open pit mines, closure of smaller mines, and potential conversion of some of the open pit mines to underground mining Additional sources of revenues are required beyond diamond mining to sustain the economic development of the country, hence the need to diversify to other minerals and beneficiate the available minerals 9

10 Diversification to Base Metals There are 5 licensed base metal mining operators in Botswana BCL Limited; Nickel/Copper Tati Nickel Mining Company; Nickel/Copper Messina Copper (African Copper); Copper Thakadu (African 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 crises 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 North west. Improvement of the road infrastructure in the western part of the country has increased the prospectively of these deposits. 10

11 Tonnes Diversification to Base Metals 45, , , , , , , , , Copper/Nickel Production Sharp increase due to start-up of new mines (Discovery Metals and African Copper) Ni Cu 11

12 Diversification to Coal Botswana has extensive, and largely unexploited, coal resources in the order of 212 billion tonnes PANDAMATENGA ZIMBABWE One coal mine (Morupule Colliery) which can produce about 3.0 million tonnes per annum, in place, but insignificant in comparison to the resource endowment NAMIBIA NCOJANE DUKWE FRANCISTOWN FOLEY SERULE BOBONONG LEPHEPHE MORUPULE MOIJABANA MAHALAPYE MMAMABULA DUTLWE LETLHAKANE GABORONE The demand for coal-for-energy has increased significantly nationally, regionally and internationally LOBATSE SOUTH AFRICA LEGEND Distribution of the Karoo Supergroup Botswana Coalfields Areas prospected for coalbed methane Potential Area/zone for Coal/CBM Development High Potential for Coal Development 12

13 Options for utilisation of Botswana coal Coal exports Exporting coal to the seaborne market; Domestic power Using coal to generate electricity for domestic consumption; Export power Using coal to generate electricity for exports to other SADC countries; Coal-to-liquids Producing liquid fuels from coal using the Fischer Tropsch and MTG processes; Coal-to-gas Producing gas from coal for power generation; Coal bed methane Extracting CBM from gassy coal seams for power generation and LNG exports; Fertiliser - Producing nitrogen-based fertilisers from coal, etc. 13

14 Coal Prospecting Licenses Coal prospecting licences are issued through a tender process to eliminate speculation. The applicant offering the best prospecting and development program is issued the licence Last tender issued to Anglo Coal 11 blocks to be put out for tender 11 new blocks will be put out for tender from September to November 2013 (orange shade) 14

15 Diversification to Coal - Coal exports Existing Ports; Durban, Mapoto and Matola Small quantities are being exported to Europe through Durban and an evaluation is being done to refurbish existing railway lines to export through Mozambique (Maputo and Matola ports) Trans-Kalahari line feasibility study has been completed, bilateral negotiations are on going to setup a project structure which will implement the project. Ponta Techobanine A private company entered into MOU s with Botswana, Zimbabwe & Mozambique for the three countries to facilitate its implementation. Richards Bay via existing rail Discussions with Transnet to consider participation in the infrastructure upgrading which can link Botswana to Richards Bay 15

16 Diversification to Coal Power Generation Two units of the 4 x 150 MW (600 MW in total) are operations and the remaining units is undergoing repair work To ensure self sufficiency in power, Botswana has put in place a build program: Refurbishment of Morupule A (132 MW), tenders for EPC contract to refurbish the power station being evaluated 300MW Morupule C Power Plant (or units 5 and 6) (Brownfield) Expression Of Interest closed on 19/05/ MW Power Plant (Greenfield) Expression of Interest is floating and will be closed in October MW gas turbines, Expression of Interest to supply gas to the existing plant to be floated in October

17 Conclusions Botswana is the investment destination of choice in: Minerals Prospecting Mining Downstream mineral beneficiation Transportation in mining Power generation Transmission infrastructure 17

18 Ministry of Minerals, Energy and Water Resources Private Bag 0018 Gaborone, Botswana Tel: ; Fax: