allAfrica.com: Botswana: Mining Soars Under Mogae (Page 1 of 2)

Looking at the various economic sectors, the mining sector most certainly had positive growth in the last decade of Mogae's presidency.

As bullish commodity prices continued their run in the past years, so has there been a significant growth in the mining sector and related activities, especially in the northern and central parts of Botswana.

The contribution of mining to GDP was 38.1 percent in 1997/98 when President Festus Mogae assumed office. The 2006/07 contribution to GDP by mining stands at 40.7 percent in national accounts year, which is slightly lower than 41.1 percent recorded in 2005/06 national accounts year.

Others have argued though that the growth of mining during Mogae's government was due to bullish commodity prices rather than his leadership acumen.

However, his government is applauded for formulating an enabling environment for mining and exploration activities, a factor that has attracted more mining investments into the country.

The Fraser Institute recently ranked Botswana 11th in the world for mining policy, environment and investment on its annual Survey of Mining Companies. Botswana's overall score was the highest ever for an African nation.

The historic opening of Diamond Trading Company Botswana (DTCB) last week caps the list of the most visible achievements in Mogae's presidency.

Despite initial doubts that beneficiation was impossible in Botswana, the team that negotiated with De Beers, led by Dr Akolang Tombale, had the gallant negotiation skills to convince the world otherwise.

The Mmamabula Energy Project also made major strides during Mogae's presidency. CIC Energy, in partnership with International Power, plans to construct a power station and an integrated coal mine. The Morupule coal wash plant was commissioned last week and the expansion of Morupule Power station is also well under way.

The positive developments in the energy related mining sector are however over shadowed by the current power crisis. These projects are going to come too little too late. How can a country sitting on about five billion metric tonnes of coal deposits have power shortages?

During Mogae's decade at the helm, copper and nickel had an unprecedented boom, largely attributed to commodity-hungry China and India than his presidency.

The boom in copper and nickel prices has even resulted in perennial strugglers BCL improving its financial performance in the last few years. As a result BCL has not applied for new emergency funding and instead repaid some of the past emergency funding that helped the company keep afloat.

Russian mining giant Norilsk Nickel entered Botswana in June last after acquiring LionOre shares for Ca$6,8-billion. The Tati Nickel mines had previously closed during the slump in copper prices but are now fully operational, resulting in Francistown experiencing a positive economic growth.

Norilsk is currently constructing a P4 billion Activox Refinery. The project is muted as one of the projects that will help arrest the illusive economic diversification that had remained a problem child in Mogae's presidency.

African Copper's was awarded a mining licence during Mogae's term and its Mowana Mine (previously Dukwe) will produce its first concentrate in the second quarter of this year. The company also announced positive results for its Thakadu-Makala exploration properties.

Discovery Metals through its Maun Copper Project, which comprises seven prospecting licences within the Kalahari Copper Belt has reported positive results. The company's other project in Dikoloti is reported to have vast copper deposits.

Diamond mining has always been the backbone of Botswana's economy and it has steadily grown in the last decade. Debswana remains the largest producer and encouragingly other players have found diamond kimberlites around the country.

This week Mogae visited the DiamonEx diamond mine near Lerala, which is scheduled to start operating in May after some construction delays.

African Diamonds also announced positive results for its AK6 joint venture project with De Beers near Orapa.

The AK6 resource is targeted to ramp up to full production in 2011 or 2012, and is estimated to produce up to one-million carats a year of high-value gem-quality diamonds.

Possible diamond mining in the Central Kgalagadi Game Reserve (CKGR) has brought Botswana into the international limelight in the last few years. Basarwa with the backing of Survivor International still cry foul about their eviction from CKGR as solely because of diamonds deposits in the area.

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