The Voice (Francistown)
30 January 2007
President Festus Mogae got a bit of exercise last Monday near Phoenix Mine east of Francistown, and hopefully, his exertions will benefit both his own health and that of the Botswana economy.
The president seemed happy enough swinging a pick to officially break ground for LionOre's Botswana Metals Refinery.
He did object, however, to being asked to fill the hole in again - after all, LionOre will be spending nearly P4 billion on the project over the next two-and-a-half years creating 3500 construction jobs in the process, so there will be no shortage of labour at the site.
But the president wasn't really upset; in fact, he said BMR was just the sort of project the government has been trying to attract.
"It has been the thrust of our policy for mineral development, and indeed other sectors of the economy, to create an environment where the country will realize maximum benefit while allowing investors a fair and decent return on their investment.
"This project...is but one example of how new mineral sector investment is having a positive effect on our economy. It should increase the life of the mine by not less than ten years and in the process the mine's output of refined nickel will increase substantially."
Those construction jobs, the 450 permenant posts at the new refinery and the boost to the local economy in the form of increased service industry opportunities are seen as major benefits of the project.
Another huge plus for both LionOre and Botswana is the fact that this first-ever refinery in the country will produce high-quality nickel and copper on site.
That means Botswana will receive all the value added potential of those fully refined metals instead of losing out on about 25-percent as is currently the case because the refining process has to be finished outside the country.
According to LionOre CEO Colin Steyn, the benefits will be shared by all of Botswana, and not be restricted to the mining sector and communities around Francistown.
"This investment of P4 billion represents a three-percent contribution to the economic diversification of Botswana, a one-percent rise in the country's gross domestic product and a two-and-a-half-percent increase in export earning and this will positively benefit all the citizens of Botswana.
Steyn also said his company's decision to build the state-of-the-art Activox refinery in Botswana, instead of in South Africa or Australia where LionOre also operates nickel mines, was partially the result of the support the company received from the government.
"Botswana stands as a shining beacon to the world of how to successfully harness and hamonise the imperatives of government and business and enable responsible development of its natural resources for the benefit of all the stakeholders.
"It is a real testament to all the government departments and ministers involved that LionOre has made such a large commitment to Botswana."
The fact that the new technology used at BMR will allow lower grade ore to be refined could be good news for BCL as well, but not because it will allow ore to be sent from Selebi-Phikwe to the new refinery.
Tati Nickel, the local company owned by LionOre and the Botswana government that operates Phoenix, is considering starting open-pit operations at nearby Selkirk Mine. If that happens, Tati's total nickel output could climb from the current 13,500 tonnes per year up to something around 40,000 tonnes per year in 2009 when the BMR refinery comes on line.
In its initial stage, the new water-based refinery that removes the need for a smelter is designed to turn out 22,000 tonnes of nickel each year. So, if Selkirk reopens, there will still be plenty of Tati ore to keep the BCL Smelter in business.
For the past two years, Tati Nickel has been operating a small-scale demonstration Activox refinery at Phoenix that has produced more than 50 tonnes of refined nickel, and the plaque that president Mogae unveiled at Monday's ceremony was pure Botswana nickel from that plant.
The current nickel price is more than P200,000 per tonne.
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