INTRODUCTION TO Botswana

The Republic of Botswana located in Southern Africa, is the world’s leading producer of gem quality diamonds, consistently producing between 30-34 million carats (Mct) between 2003 to 2007.

The exploitation of the country’s mineral resources has been a key factor in the development of Botswana since independence in 1966. Botswana is best known for its diamond mines, although the Selebi-Phikwe copper nickel deposit has also been exploited since the 1970s.

The Government of Botswana has set an objective for the minerals sector to continue getting the maximum economic benefits for the nation while enabling private investors to earn competitive returns. Government policy encourages prospecting and new mine development, and it promotes opportunities for linkages to the rest of the economy to expand value-added activities, especially through downstream processing of minerals, where it is commercially viable.

The fiscal, legal and policy framework for mineral exploration, mining and mineral processing in Botswana is continuously being reviewed to make it more competitive.

INVESTMENT OPPORTUNITIES

Botswana is known world wide for its diamond mining, and since the early 1980s, the country has been the world’s largest producer of gem diamonds. In addition, it has significant reserves of copper, nickel, gold, soda ash, coal, and salt; and exploration for these and other minerals is very active.

One of the largest opportunities for profitable investment lies in developing the country’s untapped coal resources since the SADC region suffers from a shortage of power as a result of increased mining activity and economic development.

In 2007 Botswana mined 33.6 million carats, approximately 22% of the world’s output of gem diamonds in terms of value. The most important product after diamonds in Botswana is copper-nickel matte. According to the Department of Mines, total matte production reached 64 368 tonnes in 2007. Copper, nickel, and cobalt production stood at 19 996, 22 884 and 241 962 tonnes respectively.

Both solar and wind energy have huge potential in Botswana; the country has undertaken a wind mapping program in an effort toward its realisation. Natural gas, contained in coal-bearing sedimentary rocks of the Kalahari Karoo Basins, is another potential energy source. An initial study has concluded that these rocks house a significant volume of gas-in-place resources.

Botswana has no proven hydrocarbon resources, but oil and gas exploration of the Nossop-Ncojane sedimentary basin and an assessment of the hydrocarbon potential of the Ngamiland region in the north west are planned. There is also potential for platinum and uranium reserves in Botswana, but this awaits further prospecting.

EXPLORATION POTENTIAL

Ever since the discovery of diamonds, copper and nickel deposits in Botswana exploration activities have been on the increase. Sustaining factors for these activities are the country’s attractive geology, the discovery of massive mineral deposits, the availability of reasonable, up-to-date and easily accessible geological data compiled by the Geological Survey Department, as well as investor friendly mineral legislation.

Exploration expenditure has reflected the state of markets for the various minerals which are prospective in Botswana. Unexploited mineral resources include asbestos, chromite, feldspar, graphite, gypsum and iron, many of which are located in remote areas and/or beneath a thick layer of Kalahari sands. Considerable opportunities also exist for coal and manganese, as well as for gold in the Francistown area.

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COMPANIES MINING IN Botswana


LEGISLATION & MINING POLICY OVERVIEW

All mineral rights in Botswana are vested in the state and it is the Minister of Minerals, Energy and Water resources who ensures that mineral resources are investigated and exploited in the most efficient way possible. This is done by ensuring the law is upheld and that investors are treated fairly through the development and implementation of the fiscal and legal policy framework for mineral development in Botswana, making the minerals sector more competitive and attractive to investors.

The new Mines and Minerals Act meets investor expectations by providing security of tenure, a stable fiscal regime which lowers the burden on marginal mines, efficient licensing procedures, and matching international best practices with regards to the environment.

Botswana’S ECONOMY

The mining sector during 2006 and 2007 accounted for 75% of national export earnings, 42% of GDP and 48% of Government revenues, mainly in the form of taxes, and dividends from diamonds.