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Mining industry wants Exploration Fund

Publishing Date : 18 June, 2018

Author : REARABILWE RAMAPHANE

Stakeholders in the Mining Industry have called on government to take deliberate action to ensure that Botswana’s underground mineral resources are taken full advantage of. The Mining industry made this call at the Botswana Resources Sector Conference held in Gaborone last week.


Stakeholders proposed that in order to sustain the future of mining in this country, government needs to participate directly in funds mobilization for the heavily capital intensive and risky prospecting and explorations stages of setting up a mine. Nigel Forrester of Mount Burgess Mining submitted that it was difficult to raise capital towards finding new mineral depositions.


He explained that foreign investors often question lack of input from Botswana financial institutions and investors. Forrester argued that for exploring companies to achieve investor confidence and adequately woo global capital, domestic funds must hold a significant stake in the exploration companies.  “First question investors ask is how much Botswana funds are injected in the project and the honest answer would be none,” he said, explaining that this would then scare off potential exploration funders from outside who reason that Botswana’s zero participation signalled no confidence on the prospected deposits.


“This then makes the whole funds mobilization excursion very difficult for us. Global funders are reluctant to pop out their money because local finance chain is not taking the lead.” Forrester, whose company is currently exploring Lead Zinc & Silver reserves in Kehabi says Botswana needs to partake fully in securing funds for new explorations if at all new mines are to be developed. “The underground resources are there, in economically minable grades and quantity so we need government to assist us in this process so that we in turn create the much needed jobs,” he said.


James Campbell – Chief Executive Officer of Botswana Diamond PLC said it was advisable for government to establish a strategic exploration fund that will be managed by the Mineral Development Corporation Botswana (MDC). “The housing of Botswana Government mining and mineral interests in one port under MDC was a great move, now the company needs to go further and actually push the development and utilization of these world class high grade deposits and resources Botswana is sitting on,” he said.


James noted that MDC needs to be allocated a certain percentage from mineral revenue and royalties by its shareholders, being the government, “This move requires political will and deliberate action from the government to actually resource and give MDC green light towards investing in these exploration companies with equity and wait on long term profitable returns and massive job creations,” he said.


Campbell further added that South Africa had recently announced the establishment of an Exploration Fund for junior exploration companies, citing that Botswana could set up Mining Incubations which encompass skills exchanges, financial provisions and other prospecting and exploration requisites.


THE FUTURE OF BOTSWANA DIAMONDS

On other deliberations Botswana’s most valuable mineral resource, Diamonds, which are currently the anchor of the economy are said to be depleting annually with  the only way being  to go underground if mining was to continue, albeit at  a heavy cost. Mike de Wit, President and Chief Executive Officer of Tsodilo Resources said there were prospects of extending Botswana‘s Diamond industry to an extra 2–3  decades  beyond the current  prospected life span of Botswana mines which is around only up to 2050.


Wit said Jwaneng and Orapa were sitting on one of the world’s most valuable diamonds, the kimberlites, “These kimberlites are only 7 in the world and some are in Russia.” “To mine the waste, that is the tailings, will take our mines further but not forever, so new prospecting and exploration needs to be undergoing to find and indentify new deposits,” he highlighted.  


Lamenting on Wit’s words Renowned Diamond Hunter who discovered Orapa mine, Leon Daniels said Botswana mining and mineral policies needed to be reviewed in order to facilitate and enable new diamond exploring companies to find new minor diamond reserves.
Daniels explained current taxations and cumbersome regulatory processes with frustrating turnaround times can only be afforded by big Companies like De Beers.


“These multi-nationals are  only interested in high grade kimberlites, this now means that minor mineralization’s with 20-25 developed mine life  span are  left neglected because junior exploration companies don’t last long due to unfriendly and outdated policies,” he said.
Daniels who previously worked for both De Beers and Anglo American highlighted that Botswana’s move to be a global Diamond hub needs to be a reality other than just talk.


“If you look at countries such as Mauritius, they do not have any diamond mining but are doing exceptionally well in diamond cutting and jewellery making, why is Botswana still lagging behind?” he said. According to Daniels and other experts Botswana can seal any diamond mining, sales and processing deal in its own reasonable terms and conditions which benefit Batswana better.


“We are talking about high grade diamond kimberlites that are very scarce and rare to find anywhere else in the world, so Botswana needs to up its  game at the negotiating tables and as a matter of urgency seal more deals which will out mass job creation for its people,”  reiterated  Leon Daniels.

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