• SELECT SITE CURRENCY
Select a currency for use throughout the site
Botswana Mining Report Q1 2009
Business Monitor International, March 2009, Pages: 63
This Botswana Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Botswana's mining industry.
Exploitation of rich mineral reserves, especially diamonds, has been a significant driver behind Botswana’s rapid economic growth. Notably, the mining sector of Botswana contributes in double digits in terms of percentage of the country’s GDP. Diamonds, along with copper and nickel, are the major focus areas in metal and mineral exploration in Botswana and earn more than three-quarters of the country’s export revenues.
The authorities of Botswana have an impressive track record on garnering the maximum benefit from the production of diamonds, and the publisher expects this trend to continue over the coming decade. Diamonds currently dominate the economy - contributing approximately 36% of GDP, 75% of merchandise exports, and 45% of government revenue - but with output set to decline, the government has enacted a number of measures to ensure that revenues are used to aid diversification. For example, a fiscal rule has been adopted which states that mineral revenue must be used to expand the economy's productive base, rather than fund consumption expenditure. Thanks to this, and other initiatives enshrined in successive six-year National Development Plans and the long-term policy Vision 2016, growth in the non-mining sectors is burgeoning.
The worldwide financial crisis has had a severe impact on Botswana’s mining sector. A slump in the global jewellery market and the cutting and polishing industries is forcing diamond producers such as Debswana – a 50:50 joint venture between Botswana’s government and De Beers - to cut output and lay-off workers. In Q408 global demand for diamonds fell, while it is reported that Botswana’s exports of the precious stones fell to virtually zero. Although the situation is likely to be temporary lower consumer demand and reduced credit will mean that sales are unlikely to return to pre-crash levels for some considerable time. As a result, the performance of the diamond sector in 2009 is expected to be weak.
Meanwhile, the copper and nickel industries have also been hit hard, with seen prices falling 70-80% from their peak. According to Bloomberg, in January 2009, Botswanan copper producer African Copper has closed its Mowana mine. The company has cited a drastic drop in copper demand and an urgent financial need to raise US$15mn in order to continue as a going concern.
The diamond sector has served the country well in recent years, having delivered healthy current account and fiscal surpluses. However, falling diamond prices are expected to severely impact the mining sector in the short-term, with exports of the precious stones slumping in Q408. Sales are expected to remain weak in 2009. Indeed, in 2008 BMI estimates that the mining industry shrunk by almost 6% in real terms, with a further contraction forecast for 2009. By the end of the forecast period, however, the sector should be returning to growth. By 2013, the publisher expects the industry to reach a value of US$6.26bn, up from a level of US$3.67bn in 2008.
Meanwhile, a fall in output in 2009-10 will extend the lifetime of discovered deposits, as will a decline in the rate of investment over the same period. Diamond output was predicted to decline sharply after 2021 as deposits became exhausted, forcing the government to concentrate on the development of other sectors in order to ensure that a robust growth trajectory could be maintained.
Botswana Political SWOT
- Botswana Economic SWOT
- Business Environment SWOT
Industry Trends And Developments
- Table: Mines In Botswana
- Regulatory Structure
- Recent Developments
- Lead And Zinc
- Regional Mining Overview – Africa
- Table: Africa Mining Business Environment Ranking
- Limits Of Potential Returns
- Risks To Realisation Of Returns
- Legal Framework
- Table: BMI’s Legal Framework Ratings
- Property Rights
- Labour Force
- Foreign Investment Policy
- Table: Middle East And Africa’s Annual Foreign Direct Investment Inflows, 2004-2006
- Table: Botswana’s Annual FDI Inflows, 2001-2006
- Table: BMI’s Trade Ratings
- Operational Risk
- Political Environment
- Industry Forecast Scenario
- Metals Price Outlook
- Table: Stock Levels At London Metals Exchange Warehouses (tonnes)
Global Industry Overview
- Regional Analysis
- Botswana’s Mining Industry Forecasts
- Table: Botswana Mining Industry Forecast
- Competitive Landscape
- Table: Key Players In Botswana’s Mining Industry
- Company Monitor
- De Beers Botswana Mining (Debswana Mining)
- Tati Nickel Mining Co
- African Diamonds
- African Copper
- Appendix A – Global Assumptions
- Table: Global Assumptions, 2007-2013
- Economic Activity
- Table: Global And Regional Real GDP Growth, 2006-2012 (% change y-o-y)
- Table: Developed States’ Real GDP Growth, 2008-2010
- Table: Emerging Markets’ Real GDP Growth, 2008-2010
- Monetary Policy
- Table: Developed Market Exchange Rates, 2006-2010 (average)
- Table: Emerging Market Exchange Rates, 2006-2010 (average)
- Appendix B – Business Environment Ratings
- Ratings Overview
- Table: Mining Business Environment Indicators
- Table: Weighting Of Components
- De Beers Botswana Mining (Debswana Mining),
- Tati Nickel Mining Co,
- African Diamonds, African Copper
A sample for this product is available. Please Login/Register to download this sample.