Botswana’s Mining Industry – An Overview of the present situation.
Botswana is one of the many countries in Africa that is fortunate to boast a diverse wealth of minerals.
However, like any nation involved in mining, Botswana’s state of affairs can be seen through mixed views.
Botswana boasts a brilliant mineral portfolio, especially since its large-scale mining diamond production began some 25 years ago. This resulted in Botswana leading at the forefront as far as diamond production is concerned. Jwaneng itself will feature among the top super pit mines in the world upon completion of the famous Cut 8 project.
Botswana has a stable full of operations. Francistown includes the Tait Nickel Mine, Mupani Gold, Orapa Mine, African Copper Mowana Mine and Bots Ash, while Selebi Phikwe has BCL Mine, Lerala Diamonds, Morupule Colliery and Morupule power station.
It is very easy to get excited about how Botswana’s mining industry fares at present. However, Charles Siwawa, chief executive officer (CEO) of Botswana’s Chamber of Mines, provides a very realistic illustration of the situation at present.
Speaking realistically
“The situation is actually not in good shape at the moment,” said Siwawa. “This is primarily due to subdued commodity prices. A lot of mines are struggling here in Botswana at the moment as they can’t sell at the required revenues to keep them afloat. There needs to be a ‘cushion’ in place between the cost profile and the revenue profile for an organisation to operate effectively. However the situation is cyclic so it will come right in the future, nobody knows for sure when but the indications are that should the market respond positively the prices will rebound. In these kinds of circumstances we are able to have an influence over costs (reducing costs where we can) whereas we have no or little influence over revenue.”
Hope in coal to liquid
Private energy company Coal Petroleum recently announced that it had commenced with the development of a 20 000bpd Coal to Liquids Co-generation and Fertiliser Project to be located in Francistown, North East District, Botswana. The project will be run over three phases until 2020 and is expected to deliver up to 304MW power to the Botswana national grid. The intention is to ultimately scale the facility to a capacity of 50 000bpd.
“The successful completion of this project will provide a foundation for a national move towards energy security and supporting continued economic growth in Botswana,” said Dr Brendon Hausberger from Holland & Hausberger, who are Coal Petroleum’s Technical Advisors.
The project has been in preparation for over 18 months, during which the baseline technical and economic assessment of a commercial scale coal-to-liquid (CTL) facility in Botswana was completed. This study has demonstrated a technically viable and lucrative business case.
The proposed project site in the Dumela Industrial Area has excellent infrastructure access; this includes power and water access to the site as well as road, rail, and housing facilities for the execution of the project and ongoing operations. Coal Petroleum has secured the key technology licences necessary for the project.
The project will bring a total investment of over US$4,2 billion (about R60,3 billion) to Botswana, and strongly aligns with the Botswana National Imperatives of energy security and independence of supply combined with the efficient and environmentally conscious beneficiation of the local coal resources.