I am honoured to have been invited to make a keynote address at this momentous occasion-the African Mining Indaba Conference of 2022.
The return to physical attendance of this important event is a sign that things are slowly beginning to return to normalcy. I must hasten to state that we are not out of the woods yet, but light is beginning to show at the end of the tunnel. I am informed that this year’s edition of the conference is held under the theme: “Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies”. Following the adoption of the Paris Agreement in December 2015, which came into force on November 4, 2016, many countries embarked on efforts to assess the consequences of climate change, and ultimately came up with policy measures that could help support the transition to low-carbon economies. ESG, a process of considering environmental, social and governance factors when making investment decisions, has become a leading form of sustainable finance in a number of companies and jurisdictions.
In line with ESG ideals, Botswana’s Minerals Policy of 2021 aims to strengthen and outline the government’s role in minerals resource management and foster effective partnerships with the private sector while at the same time strengthening institutional frameworks. The government of Botswana, in administering the policy, is guided by the principles of: ensuring timely development and implementation of mineral projects; fostering a competitive environment for investment, security of tenure, provision of a stable, transparent, progressive, predictable fiscal regime, protection of the environment, public safety, contribution to sustainable economic growth as well as support to sustainable livelihoods.
Distinguished Ladies and Gentlemen, the evolution of Mining in Africa, is one that is characterised by mixed fortunes; some pleasant, and some, not so pleasant. This year’s theme comes at the right time, when many jurisdictions are standing at the crossroads and searching for a path that leads to the fulfilment of Sustainable Development Goals (SDGs). In the wake of the deteriorating state of global climatic conditions, no one can afford to be left behind; no one should be left behind. Botswana has a long history in exploration and mining. While archaeological and other scientific evidence points to mining activities from as far back as the Middle and Late Stone Ages, modern mining started with the re-discovery of gold around the present-day Francistown, in 1865.
Approximately 25% of Botswana land area is covered by Pre-Kalahari Geological Formations and this is where all of the current operating mines in Botswana have been discovered. The unexposed 75%, covered by sands, are potential untapped mineral prospects that can drive mineral investment.
Botswana government continues to invest in creating pre-competition data to promote exploration. The Government is completing a project that will also bring coverage of geological mapping to 90% nationwide through interpretation of geophysics data covering Northern Botswana that has, in the past, remained largely unexplored due to sand cover and remoteness.
We therefore, implore mining investors present at this Mining Indaba conference to seriously consider coming to Botswana to carry out exploration and mining projects. We continue to expand the country’s geological knowledge by mapping the sub-surface geology to unlock mineral potential, as well as providing comprehensive data to private sector investment in mineral exploration. Distinguished Ladies and Gentlemen, since the discovery of diamonds in Botswana in1967, minerals have played a leading role in taking Botswana from amongst the poorest of countries to a middle-income status.
Mining remains the most important sector of Botswana’s economy. Mineral production is dominated by diamonds, with lesser contributions from coal, soda ash and salt, gold, nickel, cobalt, silver, uranium, manganese and iron ore. However, what has over the years been a thorn in the flesh is the slow uptake of mineral beneficiation industries to diversify the economy; and this is an investment growth potential for the mining sector. The mining sector in Botswana was hit by a decline in the global mineral markets coupled with a loss of contribution from the base metal mines such as BCL and Discovery Metals during the period 2015 to 2019. Copper and nickel prices have been weak over the past four years, resulting in various mines across the world closing permanently or temporarily. As a consequence of this, we have experienced many job losses, and we must put up sound mitigation strategies. Despite these problems, there are signs of improvement in the market, which may support the re-opening of some of the affected mines, as well as the development of new mines. Prospecting for copper, nickel and silver in the Kalahari belt is still continuing.
Distinguished Ladies and Gentlemen, the economy of Botswana was projected to grow by 12.7% in 2021, before moderating to 4.0 percent in 2022 and 4.2 percent in 2023. The positive growth reflects the easing of restrictions and resumption of activities that were postponed due to the COVID-19 pandemic. These are anticipated to contribute to improvement in economic activity, particularly in the major sectors of mining (mainly diamond industry) trade, hotels, restaurants, as well as growth in the transport and communication sector against the backdrop of advances in information technology.
Botswana has enough skilled mining personnel, from graduates to experienced operators and experts that the industry is not able to absorb. The organised and regulated labour movement, which facilitates labour relations that offer platforms of engagement on labour matters, manages the risk of labour disputes that could disrupt operations. The overall progressive nature of Botswana’s mineral policy and laws together with its investment climate makes Botswana competitive for the next investment dollar in the mineral space.
Distinguished Ladies and Gentlemen, this Mining Indaba conference is taking place at the right time when the world is emerging from a pandemic that brought livelihoods and businesses to a standstill from its outset. We are happy that signs of recovery both in terms of human health and economic activities are beginning to show as countries continue to vaccinate their populations. Botswana has been able to vaccinate more than 64% of the target population exceeding the set World Health Organisation (WHO) target of 40% of the eligible population by December 2021. This milestone, I believe should incentivise investors to visit, as the risk of the spread of the COVID-19 virus is within manageable thresholds.
The continued relaxation of COVID-19 travel restrictions is anticipated to increase sales of minerals with corresponding increases in output levels in the medium term. Furthermore, the positive prospects in the mining industry are boosted by copper production, which started in 2021. The mining industry has seen a significant increase of prices for mineral commodities in 2021.
For Botswana, the positive prospects for the mining sector are expected to continue into 2022, in line with increased demand for rough diamonds and improved diamond prices.
In conclusion, I want to reiterate that given the prevailing business environment, Ladies and Gentlemen, I wish to extend to all of you an invitation to visit Botswana and invest in the country’s vast wealth of mineral resources.
As I have indicated, my government has gone to great lengths to ensure that the environment is right and conducive for investment. I thank you for your attention.