This is a best prospect industry sector for this country. Includes a market overview and trade
Last Published: 7/22/2019

Overview

For the past four decades the mining sector accounted for roughly 85% of national foreign exchange earnings, one-third of government revenue, and a quarter of GDP.  Botswana’s mining industry consists mainly of diamonds and mining currently accounts for about a third of government revenue.  Other minerals mined include nickel-copper, coal, soda ash, gold, silver, semi-precious stones, and granite, and Botswana also has untapped uranium, lead, and zinc reserves which companies are seeking to exploit.

In 2014 Botswana and Namibia signed an agreement to establish a jointly run company that will supervise the construction of the Trans-Kalahari Railroad.  The project, which has been under consideration for years, is estimated to cost upwards of $15 billion to build and was proposed as the export route for Botswana’s coal reserves, estimated at 212 billion tons.  The GOB is now looking at converting the project from a coal railway to a multi-commodity line in an effort to attract investors.

U.S-based companies have captured a sizable portion of the mining equipment market.  Mining equipment is supplied by distributors mainly located in South Africa and recorded as imports from the country of supply and not as imports from the country of origin, hence the understated value of imports from the U.S.  All heavy equipment and machinery are imported, as there is no local production or assembly.  Local distributors tend to focus on light industrial non-specialized equipment for mines, e.g., switches, pumps, cleaning equipment, rather than heavy mining equipment.  Distributors report that mines in Botswana, in general, are interested in purchasing high quality, long-lasting industrial equipment with robust warranties and therefore are less price-sensitive than most industries in the country.

In 2014 the GOB and the Chamber of Mines created a committee to oversee the purchase of mining supplies with a 10% preference towards those produced locally.  Compliance is not legally required but strongly recommended.  The De Beers Group and its affiliated mines employ this practice, and it is regarded as an industry standard.
 

Sub-Sector Best Prospects

Mining equipment, services, mineral prospecting, and consulting are sub-sector prospects.  Botswana wants to capture more of the diamond production value chain including trading, cutting, and polishing. 
 

Opportunities

The Diamond Hub, established in 2008, aims to attract diamond technology companies and has four areas of concentration: diamond cutting and polishing, establishment of a rough and polished diamond trading facility, development of diamond jewelry manufacturing, and support industries.  In 2016, OPIC approved the first  $125 million loan guarantee facility of its $250 million loan guarantee to stimulate diamond processing in Botswana in partnership with Barclays and Lazare Kaplan.  The organization signed the second tranche of $125 million loan guarantee facility with the Standard Bank Group, otherwise known as Stanbic Bank in Botswana in September 2018. The De Beers Group relocated its diamond sorting and sales facility from the United Kingdom to Botswana.  A Special Economic Zones (SEZ) Authority has been set up to streamline investment in sector-targeted geographic areas in the country.  The two Gaborone area SEZs will be multi-use but focus on diamond processing and financial services, and the GOB plans to implement these SEZs first under the new policy.  The GOB also plans to operationalize a Selibe-Phikwe SEZ to focus on mineral processing.

Opportunities for trade also exist with Debswana mining company as the largest mining company in the country.  In March 2019, Debswana announced the commencement of two new ventures: Cut 9, to tap into a 40 million ton ore body at Jwaneng mine extending production to 2034, and Cut 3 for its Orapa mine. 

 

Web Resources

Ministry of Mineral Resources, Green Technology & Energy Security: www.gov.bw/en/Ministries--Authorities/Ministries/Ministry-of-Minerals-Energy-and-Water-Resources-MMWER/
Debswana: www.debswana.com
Ministry of Investment, Trade and Industry:  www.mti.gov.bw
Botswana Unified Revenue Services (BURS):  www.burs.org.bw

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