BOTSWANa CHAMBER OF MINES
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Charles Siwawa, CEO of the Botswana Chamber of Mines talks exclusively to South Africa Magazine.
By Ian Armitage 2
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otswana has experienced a serious resurgence of mining and exploration activity, with new discoveries seeming by every month. Charles Siwawa, CEO of the Botswana Chamber of Mines, says the minerals sector of the country is flourishing and that “exploration for
Botswana Chamber of Mines focus MINING
a wide variety of minerals is active and several new minerals projects were launched during the past five years or so.” The Botswana Chamber of Mines has been operational for nearly 20 years through the various mining houses
namely Debswana, BCL, Botash, Kgale Quarries and some exploration companies. It is a private sector body that is non-profit making with the running of the organisation drawn from among the industry leaders. As the industry has grown, so too has the Chamber. “The increasing mining activity in the country saw the creation of the Botswana Chamber of Mines secretariat in Gaborone,” Siwawa says. “That decision was made in 2009, I was brought in as CEO in April 2010 and the office was officially opened by the Minister of Minerals Energy and Water Resources Dr PHK Kedikilwe on 23rd November that year.” The purpose of the Botswana Chamber of Mines is to serve the interests of the mining companies and to influence policy decisions and strategic intents within the government, nongovernmental organisations and related bodies, Siwawa says. “We essentially promote and protect the interests and image of the mining industry here in Botswana.” Botswana, he adds, is a country “getting back to its feet” following the disasterous effects of the 2008 global economic meltdown. “The downturn in the global economy commencing 2008 has had serious repercussions
The fact that the Diamond Trading Company (DTC) in Botswana will sort rough stones locally is a huge milestone
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Botswana Chamber of Mines focus MINING
on the mining sector in Botswana. The industry went into a lull with some companies closing down whilst others retrenched staff all in an effort to reduce costs and weather the storm. I think since 2010 however the economic landscape has been changing, picking up, to the extent that in July 2011 the country recorded the highest sales of diamonds. That has tailed off slightly in terms of production and we are not yet back to the pre-2008 crisis levels but the upswing can be felt. On August 17, 2012 another diamond mine, Karowe, operated by Lucara Diamonds was officially opened by the President of the Republic of Botswana, His Excellency Lt General Seretse Khama Ian Khama.” Diamonds are of course a girl’s best friend; they’re Botswana’s too. Earlier this month, De Beers began rough stone sorting in the country, a first step in its transfer from London to Gaborone. Rough stone sorting or aggregation operations had previously been based in London for nearly 80 years. Chief executive officer Philippe Mellier said it was the first step in a process that should be complete by the end of 2013. The move will transform Botswana into a leading international centre, with about $6 billion worth of diamonds expected to flow through the country. Botswana and De Beers signed a 10-year deal to move its rough stone sorting and trading division from London to Gaborone in September 2011.
Under the deal Botswana will for the first time directly sell 10 percent of gem stones produced locally while De Beers will also increase the value of diamonds it makes available to manufacturing companies in the country. “The fact that the Diamond Trading Company (DTC) in Botswana will sort rough stones locally is a huge milestone. From the point of view of what it’ll do for the
The downturn in the global economy commencing 2008 has had serious repercussions on the mining sector in Botswana 4
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country, we believe it is going to inject a significant amount of money into the economy, while we’ll get increased tax yields from the sale of diamonds in this country and also you’ll have a number of secondary industries growing from this move.” Siwawa is excited. He says the whole country is. “There is definitely optimism in Botswana. There is lots of exploration taking place for all kinds of minerals. We’ve coal reserves that are deemed to be the second largest in Africa, behind only to South Africa and we have another new copper mine that has commenced production in the western part of the country that will have a minimum of a 30-year life. www.southafricamag.com
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There is more exploration currently on-going and we’re certainly expecting more mines to open in the not too distant future.” Botswana’s mining industry has subscribed to the initiative by the government to diversify the economy from the current mining activities. The country is currently very heavily dependent on diamonds for its revenue. “We cannot just depend on diamonds,” Siwawa stresses. “We have a diverse mineral resource. We are using it. I think we will soon see Botswana at the height of activity in terms of mining in the next five to 10 years and I say that because we have such a huge coal deposit and opportunities with copper, nickel, silver, uranium, iron ore and many other metals and minerals. The opportunities with coal are dependent on the infrastructure plan currently being designed to get the raw coal out and into eastern 6
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markets – Asia in particular. The desire is to supply India and China but we’re a landlocked country, and the hope therefore lies in the ability to transport by rail through to the neighbouring countries with ports such as South Africa, Namibia and Mozambique.” It all sounds very promising. But there must be challenges, right? “Yes there are. I touched on one the lack of transport infrastructure, in particular railway lines, is one of the biggest challenges hindering progress in the country’s coal sector. Also skilled manpower is in short supply within Botswana and this is more pronounced in the mining industry where the dependence on expatriate skills is heavy. Training of local skills from different perspective is ongoing in a country where there are graduates trained and qualified in inappropriate skills. The Botswana Chamber of Mines has identified
Botswana Chamber of Mines focus MINING
skills deficiencies in the industry and has put strategies in place in order to address these issues fully. The Chamber is also addressing safety health and environment issues within the industry. Great strides have been made in these areas to ensure the industry operates sustainably.” Investors are taking note of what Botswana has on offer. The country has helped its cause by going on the charm offensive, amending its Income Tax Act and Value Added Tax Act to lean towards investors. The amendment of the Income Tax Act alone resulted in a reduction of company tax from a minimum of 25 percent to 22 percent. “It is an attempt to lure, to entice and to goad companies to search for non-diamond investments,” says Siwawa. “The country’s success is now falling to a new breed of eager young start-up entrepreneurs in mainly coal and, more recently, also in the copper/silver belt.”
The government has embarked on a strategy to improve the ease of doing business in Botswana and to improve the country’s global competitiveness. “The attitude of the government is that the private sector must be given the opportunity to participate as freely as possible in mining,” says Siwawa. A coordinated effort is being made with the new Coal Development Unit in the Ministry of Minerals Energy and Water Resources to have a more substantial go at developing the country’s coalfields. “There is a national strategy on coal development and we have estimated coal deposits of 200-billion tons; coal presents a growth opportunity.” Siwawa’s view is that there is no reason why Botswana’s other minerals combined mining revenue cannot exponentially grow and even offer diamond revenue some competition. Botswana, then, is on the up and up. “I think in the next 10 years we’re going to see Botswana being transformed into one of the largest players in the economy of the world in terms of supplying raw materials and natural resources. We believe mining will play a significant role in the development of Botswana as a country and also the region as a whole.” To learn more visit www.bcm.org.bw END
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