Digging for diversity in diamond rich Botswana

21 December 2014

In Africa, Botswana is often seen as a diamond in the rough.

It's perceived as the least corrupt country, with the longest surviving multiparty democracy on the continent, and boasts one of the world's fastest-growing economies.

But, following the global economic downturn in 2008, and increasingly volatile commodity prices, the country's reliance on diamonds has come into question.

For the first time Botswana finds itself cash strapped, in negative growth, and having to go to international donors.

The country is looking to diversify its economy by strengthening existing sectors like tourism and cattle farming, and investing in burgeoning industries spawning from technology and entrepreneurship.

Yet diamonds by far outshine any other industry in Botswana, accounting for one-third of GDP, 70% of export earnings, and about one-third of the government's revenues.

However, production has peaked, and experts believe reserves of the precious stone may run out by 2030.

Unemployment is also on the rise, with official jobless rates nearing 20%, and an estimated 45% of Botswana's population living below the poverty line.

Economic growth was also negative in 2009, and the industrial sector shrank by 30%.

Signs of labour unrest have also began showing following public sector strikes in recent years.

As Linah Mohohlo, who has been governor of the Bank of Botswana for 15 years, put it in a recent interview  read more ...........

Australian Company Suspends Copper Mining in Botswana

Gaborone, Dec 17 

The Australian company Discovery Metals Ltd today announced it will suspend copper mining in Botswana within the next six months, due to a deteriorating world price of the metal.

An internal study on economic feasibility of their investments in the field of Boseto, northwest Botswana, reflected a declining market perspective due to the value of the metal has dropped by 1,000 dollars per ton (or 15 percent) since January.

The recent investment of major corporations such as Rio Tinto and BHP Billiton to amass new portions of a global market worth 140 billion dollars has put pressure on more discreet producers such as Discovery.

Since last June, the company based in Sydney and stock prices in Shanghai had been warning of an unbudgeted increase in its costs of operation in cash after excess global supply of the product. The group's shares fell today up to 35 percent, according to the digital magazine Mining Weekly.

Botswana is the largest diamond producer in the world and a haven for luxury safari tourism. It has been one of the fastest growing economies in Africa since the 1970s.

Mongolia restarts bids for giant coal project

Dec 3 2014

Mongolia has restarted bidding for development of the giant Tavan Tolgoi coal project as it tries to boost a flagging economy hit by falling commodity prices and a decline in foreign investment.

A consortium comprising China Shenhua Energy (OTCPK:CUAEF), the world's largest coal producer by volume, Sumitomo Corp. and a subsidiary of Mongolian Mining (OTCPK:MOGLF) has submitted a bid; Peabody Energy (NYSE:BTU) and a local Mongolia mining firm also submitted separate bids.

Tavan Tolgoi holds ~7.5B metric tons of coking coal, but Mongolia's cash-strapped 

government has struggled to finance its development

Majwe Mine integral to Cut 8 project

Contract miner Majwe Mining has been hailed as a model employer and a critical player in delivery of Jwaneng Mine’s flagship Cut 8 project. This was said by Albert Milton, general manager of Jwaneng Mine, at Majwe Mining’s three years anniversary celebrations.

Majwe Mining was engaged as a joint venture partner to provide mine contracting services to Jwaneng Mine in the Cut 8 project, a key strategic imperative meant to extend the life span of the mine from 2024 to 2031. Launched in December 2010, the Cut-8 project will transform Jwaneng into one of the biggest open pit mines in the world. At P24 billion, it was the largest-ever single capital commitment in Botswana’s private sector. The investment includes all project capital, mining fleet capital, sustaining capital and all working costs for a period of over of 20 years. At completion the Cut-8 push back will have mined 658 million tons of waste and delivered 92 million tons of ore. Majwe Mining has a responsibility to move over 156 million bank cubic meters of waste material safely. The Cut 8 pit dimensions will be 2.4km long, 1.6km wide at surface and 624m deep.

Milton also lauded Majwe Mining as a model employer that increased its staff compliment from 650 when it commenced operations in 2011 to over 768 currently. The total workforce of Majwe and its main sub-contractors so far stands at over 1,200. For his part Rod Fraser, project director at Majwe Mining said the company is currently operating at unprecedented levels of mine production.

“We are very proud to bring new mining techniques, methodologies, systems and skills to Botswana. We have are committed to leaving a legacy of enhanced skills across the many aspects of mining operations and mining management to the greater benefit of Botswana,” he said.

He added that Majwe Mining has brought new work arrangements, including rosters and hours of work that align Botswana’s mining industry to international best practices.
“At Majwe Mining we are not just creating miners; we are creating contract miners. Contract miners sell a service that adds value to their clients. They carry out their work safely and efficiently; they cushion the client from business risk,” said Fraser.

Wal King sparks Sundance Resources protest vote

November 27, 2014

Sundance Resources shareholders have narrowly approved the appointment of the controversial former boss of Leighton Holdings, Wal King, to their company, with more than 40 per cent voting against him coming on board as chairman of the iron ore hopeful.

At a tense event, shareholders also gave the company's remuneration report its first strike, with 55.4 per cent of votes swinging against the package.

The shareholder rebuke comes as the company, which plans to develop the Mbalam-Nabeba iron ore mine in central Africa, works to cinch the billions of dollars of funding needed to develop the landlocked mine and critical infrastructure in the worst conditions iron ore has seen in more than five years.

Mr King said the vote against the remuneration report was "not completely unexpected" due to its major shareholder Hanglong Mining Investment voting against the resolution.

Sundance was the target of a protracted $1.3 billion takeover bid from the Chinese group between 2011 and 2013. Hanlong was approved by the Foreign Investment Review Board to buy Sundance in June 2012, but the deal collapsed after the Chinese firm failed to meet financing deadlines and the Australian Securities and Investments Commission launched investigations into three of its Australia-based executives for insider trading. Hanlong retains a 14.1 per cent stake in the company. Sundance could face a vote over a possible spill of the board if more than 25 per cent of shareholders oppose the remuneration report at next year's annual meeting.

Asked how he will steer the company away from this threat during the course of the 2015 financial year, Mr King said the company will announce further cost saving measures in due course. "As George Jones has said, the company will be looking at the "go forward" over the next 12 months and the "go forward" means the structure and strategy of the company in relation to the market and in simple terms the company has to cut it costs to suit the occasion. We will make an announcement in due course. We have to go evaluate first, we are not going to shoot from the hip."

Managing director Giulio Casello echoed his new chairman's comments, explaining that the company will be making further cost reduction over the next "couple of weeks". "The share price is 3.6¢ and shareholders are unhappy about that," Mr Casello said. "We have cut costs and we obviously need to cut more and we will do that. We will announce something in a couple of weeks but we are looking at all areas – people, salaries – but we will announce something in a few weeks."I think it is important that we conserve cash during these difficult times and we are committed to conserving our cash into 2016 and the board and management will take the steps required to do that."

The iron ore price has crashed more than 45 per cent this year to below $US70 a tonne, casting shadows over the future of marginal iron ore producers and companies seeking to develop iron ore mines.

Mr King believes the price will recover in time for the commencement of production at the $4.6 billion Mbalam-Nabeba iron ore project, which is being targeted for late 2019, but he was unwilling to be any more specific. "As Paul Keating said – every resident galah has a theory on the iron ore price," Mr King said."I think there will be a recovery but I don't want to state any inflection point. 

The cost of production of a lot of iron ore mines in China is around $US100 a tonne and a question is how long those uneconomic mines can continue. "It is a cyclical industry but the only unusual thing about this cycle was supposed to be a super cycle that was never going to come to an end – or so the herd said. But if you have been in business long enough you will understand that there are cycles and the price will go up, come down and then go back up again."

The results of the meeting are comparably fiery to the amicable position of shareholders last year, when all resolutions passed comfortably.

Mr King takes over as chairman from George Jones who was in the role from 2006 until August 2009 but returned in 2010 after the company's entire board of directors died in a plane crash in Africa.

Mr King served 23 years as chief executive of the construction company until 2010, and has since attracted controversy over his handling of corruption allegations during his time at Leighton.

Director Fiona Harris and Wal King were the only directors up for election at the meeting and received 44.3 and 43.2 per cent of votes against them respectively, narrowly securing them their seats.

Shareholders also didn't show much support for the ratification of a convertible note and the approval of issue two tranches of options to Ukrainian billionaire Gennadiy Bogolyubov, who agreed to invest $40 million in the company in September. The resolutions marginally passed.

Mining sector expected to continue growing

Oct 2014 The future of Botswana’s mining sector still looks bright. This is according to Botswana Chamber of Mines CEO; Charles Siwawa, who told Yarona Fm news that many exploration companies have found minerals that are feasible to mine. Siwawa said the mining sector will continue growing and injecting into the country’s economy.

MAJWE Mining honours employees

Oct 2014

Majwe Mining Joint Venture recently celebrated its three years of operation combined with a staff award ceremony to honour its employees who have served the company diligently. The company has been contracted by Jwaneng Mine through the Cut 8 project to mine waste material since 2011 and the project is expected to be completed in 2017.

Speaking at the ceremony, Jwaneng Mine general manager, Mr Albert Milton noted that the Cut 8 project was Jwaneng Mine’s key strategic plan to extend the life of the mine from 2024 to 2031. He said due to the magnitude and the impact of the project on the Botswana economy, it was important for Debswana and Majwe Mining Joint Venture to work diligently to ensure that it was delivered safely and efficiently. “The Cut 8 project with its launch in December 2010 was the largest-ever single capital commitment in Botswana’s private sector. The investment of P24 billion includes all project capital, mining fleet capital, sustaining capital and all working costs for a period of over 20 years,” he said. He further noted that at completion, the project would have mined a total of 658 million tonnes of waste and delivered 92 million tonnes of ore, while the pit would be expected to be 2.4 kilometres long and 1.6 kilometres wide with a depth of 624 metres.

Mr Milton said continued production at Jwaneng mine would enhance revenue turn-up for all stakeholders including the Botswana government. “With revenue accrued from Debswana, the government has been able to carry out its long term developmental programmes, like physical infrastructure, education, health, housing, human capital development, science and technology name a few,” he said.

Mr Milton further applauded Majwe Mining and its business partners for their positive contribution to the growth of businesses in Jwaneng and surrounding areas. He also acknowledged the company’s efforts for creating employment as evidenced by the increase in the number of employees from 650 in 2011 to the current 768. He commended the company for improving the lives of communities within which they operate through a robust Corporate Social Investment programme.

For his part, Majwe Mining Project director, Mr Rod Fraser said even though it was challenging to deliver a large scale project like the Cut 8, it was worth it to acknowledge the commitment and dedication of the employees who had invested so much in it. He said they should be motivated by the fact that the future livelihood of many Batswana depended on the successful delivery of the project. “This is a large scale contract mining project, and it is the first of its kind in Botswana. As you already heard this project is the largest ever single project undertaken by this country and there is no doubt that many in the mining industry, both here and internationally are curious and are watching with interest to see how we perform, to see if we are able to live up to our obligations under the contract. To see if we can add value to our client’s business and deliver the project on time to the nation and its people,” he said.

Shenhua to buy 1 billion tons of TT coal, build railway

27th of 11, 2013

Ya. Batsuuri, CEO of state-owned Erdenes Tavan Tolgoi, has said three mining companies have agreed to export 1 billion tons of coal to China’s Shenhua Group Corp.  in the next 20 years. The total value of the exports at current prices would be about $50 billion. The memorandum of understanding signed between Erdenes Tavan Tolgoi, Mongolian Mining Corporation, and Tavan Tolgoi JSC and Shenhua would ensure a long-term buyer for the companies operating in the Tavan Tolgoi basin, which contains 6.4 billion tons of coal reserves. Any of the exported coal, if it is not wanted by Shenhua -- itself China’s biggest coal producer -- can be sold on the international market.

In a separate MoU with the three companies and the state-owned railway company, Shenhua agreed to build a freight line to carry the coal to the Chinese border.