Botswana - Mining



Botswana, home to the world's largest gem diamond mine, was the leading producer of diamonds by value. The diamond sector accounted for 33% of GDP in 2000, 45% of government revenues, and 75% of export earnings. Nickel, cobalt, and soda ash production also played significant roles in the economy. The mining and quarrying sector engaged 6% of the workforce in 1999. The northeast contains copper, nickel, and precious metals; the northwest has copper and silver; and the south holds base and precious metals. Other valuable minerals produced included agate, clay, coal, cobalt, gold, salt, sand, silver, soda ash, and construction stone. Major mines were situated in regions with few job opportunities. Diamonds were the most notable area of exploration in 1996, but Botswana's mineral resources were still largely unexplored. Mineral rights (separate from surface rights) were vested in the state. For significant mineral operations, the government usually exercised its legal right to acquire for free an equity interest of 15% to 25%. Royalties are collected on the sales of certain minerals, such as 3% on base metals, 5% on gold, and 10% on diamonds. The 1999 Mines and Minerals Act, designed to promote foreign investment, diversify the economy, and reduce reliance on the diamond industry, continued to vest all mineral rights in the state, but introduced a new "retention license." The government retained an option to acquire up to a 15% interest in new ventures on commercial terms, thus abolishing its previous free equity participation. Favorable geologic environment and mineral investment climate, political stability, and low tax rates should make Botswana a target for foreign mineral investment.

The value of mineral production in 2000 was approximately $2.42 billion, of which diamonds accounted for $2.13 billion, or 88%; copper-nickel-cobalt for $243 million; and soda ash for $26 million. For the major commodities, the value of production was approximately equal to the value of exports. Diamond production increased by 6% in 2000, because the Orapa mine came onstream in May 2000. Copper and nickel production were up by 2%, while heavy rains and flooding of the brine evaporation pans saw salt and soda ash production drop by 20% each. The United Nations sanctions against "conflict diamonds" from civil war zones in Angola, Congo, and Sierra Leone increased the market appeal of diamonds from Botswana.

The government maintained an equity position in most of the major mining companies, but the industry was operated, for the most part, on a privately owned free-market basis. In a 50–50 joint partnership with De Beers Centenary, the government owned Debswana Diamond, the country's largest mining company.

De Beers Botswana Mining (Debswana) and Botswana Concessions (BCL), both partly owned by the government, developed major mineral fields in the eastern and central regions in the 1970s. Starting in 1981, the Debswana diamond mine at Orapa had to stockpile diamonds to halt the decline in world prices. The world's largest gem diamond mine was opened at Jwaneng in 1982, and processing capacity was increased in 1996 by the addition of a fourth treatment line. Jwaneng, the richest diamond mine in Africa, treated 9.24 million tons of ore and recovered 11.52 million carats in 2000 at an average value of $108 per carat. Reserves and resources in Jwaneng's three main kimberlite pipes were reported to be 287.6 million tons at a grade of 143.6 carats per hundred tons. The Letlhakane Mine treated3.51 million tons of ore and recovered 960,000 carats at an average value of $191 per carat. The Orapa Mine treated 14.68 million tons of ore and recovered 12.17 million carats at an average value of $47 per carat. Total reserves and resources at Orapa were reported to be 652.9 million tons at a grade of 49 carats per hundred tons. Debswana completed an expansion at Orapa in 2000 that was designed to double production to 12 million carats per year and treat an additional 8.9 million tons per year of ore. It was expected to allow production from the open pit for 30 years, with the potential of extending the mine life by another 20 or 30 years by shifting to underground mining. The expanded facilities included a completely automated recovery plant (CARP), a 15-story building in which only X-ray technology is used to recover diamonds and no human picking or sorting is done. Botswana's three most important diamond mines (with 1996 production in carats) were: Jwaneng, 11.2 million; Orapa, 5.6 million; and Letlhakane, 0.9 million. Botswana's diamond output for 2000 was 24.2 million carats, up from 17.4 million in 1996, and reserves were reportedly 300 million carats.

BCL developed a nickel-copper smelter at Selebi-Phikwe in the 1970s and owns the Phikwe, Selebi, and Selebi North mines. National output for mined copper in 2000 was 38,420 tons, up from 25,043 in 1998; for mined nickel, 34,465 tons, up from 21,700 in 1998; and for smelted cobalt, 319 tons, down from 408 in 1996. BCL's smelter produced 62,000 tons of matte that contained 20,977 tons of copper, 24,218 tons of nickel, and 319 tons of cobalt. Reserves were reported at 27 million tons for BCL at a grade of 0.86% copper and 0.84% nickel, and for Tati Nickel's Phoenix Mine, at 46 million tons at a grade of 0.32% copper and 0.56% nickel.

A brine mining and treatment facility at Sua Pan produced 191,043 tons of soda ash in 2000, down from 233,643 in 1999, and 184,755 tons of salt, from natural soda ash, down from 233,069 in 1999, both declines resulting from heavy rains in early 2000. The country produced an estimated 80,000 kg of other precious gemstones, principally agate, in 2000, up from 38,000 in 1998. Gold output declined to 4 kg in 2000, from 28 in 1997. Analysis of 103 holes drilled through 2000 by Gallery Gold identified inferred mineral resources of 5.84 million tons of mineralization at a grade of 3 grams per ton, equal to 17,300 kg.

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