Botswana Starts Work on its First Iron-Ore Mine

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Botswana Starts Work on its First Iron-Ore Mine

GABORONE-Botswana has started work on its first iron-ore mine, according to a senior government official, as the economy struggles to diversify its economy away from diamond mining.

As the coronavirus crisis evolved last year, Botswana's significant reliance on diamonds, which account for a fifth of its GDP and more than two-thirds of its foreign exchange income, was exposed.

The pandemic reduced demand for diamonds and drove down prices, causing the country's economy to contract by nearly 8% after previously growing at much to 4%. Since then, Botswana has attempted to capitalize on its immense natural resources by issuing mining licenses for commodities like coal, copper, and iron ore.

A license to develop the Ikongwe iron-ore mine, which is held by a unit of India's Yashomann Industries, was recently obtained. "The mine is also looking at processing some of the run-on-mine material for local steel production. This will revive the local steel industry," said Lefoko Moagi, minister for mineral resources, green technology and energy security.

In July, Chetan Patil, director of Vision Ridge, the company that is constructing the mine, said that the deposit would yield a million tons of iron-ore per year for the next ten years, with the iron ore concentration of up to 65 percent, or 65 percent iron.

For steelmaking, anything with more than 60% iron content is considered good.

"Because of the prevailing high international market, we will target the export market but we also have plans to set up a pig-iron plant in Botswana," Patil said.

Iron-ore prices have risen to record highs in the last year, averaging approximately $240 per ton for various grades, owing to robust demand from China, which produces more than half of the world's steel.