Botash share disposal to kick off
Chakalisa Dube | Monday February 6, 2023 06:00
CAH, a 100% subsidiary of the Bud Group, holds its equity in Botash alongside government which equally owns 50%. The SA firm announced plans to dispose of Botash shares late last year.
This week, sources told BusinessWeek that the process to dispose of the shares will officially begin next month after all the conditions of divestment have been set.
It is reported that the 50% shares have generated massive interest from undisclosed firms abroad.
However, it remains unclear if the government is interested in attaining 100% ownership of the mine.
Since Botash’s establishment, government has always limited its stake to 50%, while the balance has always been held by a technical partner. However, in recent years, the establishment of the Minerals Development Company Botswana has seen government move to full shareholding of Morupule Coal Mine and BCL Ltd.
It is anticipated that the transaction will take several months to complete.
CAH representative Greg Hirschowitz, who had initially promised to respond to a BusinessWeek questionnaire on the latest developments, said he was constrained to comment.
“All details relating to the sale of Botash will be made public in due course. “Parties tasked with executing the sale process will release a statement.”
The potential sale of Botash coincides with a time in which various stakeholders in the country have been pushing for more empowerment of locals to acquire shares in the mining industry. There has been concern over the growing ownership of influential mining firms by foreigners or foreign entities.
Botswana Mine Workers Union (BMWU) president Joseph Tsimako recently told BusinessWeek that the union would prefer to see the shareholding from CAH taken up by a citizen entity.
“Our wish is to see employees or citizen companies being given priority to purchase the shares once they are disposed of. “As a union, we would also be interested in purchasing the shares subject to the approval of our members,” he said. CAH came in as a technical partner for Botash in 2009 after buying shares that De Beers, Anglo American, AECI, and various financial institutions owned. The Bud Group has said that the sale of the shares is part of a reorganisation which would also result in divestment from some of its affiliates and subsidiaries. The sale of the shares is not expected to impact on, or interfere with, the ongoing plans and it will be business as usual for the company. It will also not lead to job losses.
Botash has long been a feather in the cap for government, enjoying a strong market share in Africa and stable revenues even in years where other commodities have underperformed.
Exports of soda ash and salt rose to P729.1 million in 2020, from P561.1 million in 2019, despite the disruptions to both movement and demand caused by COVID-19. In 2021, exports of the two commodities were up to P808.5 million.
Botash’s strength lies in its competitive edge in the region and the lucrative contracts it holds, particularly in South Africa.
Soda ash enjoys resilient demand in industries such as glass production, chemicals, and detergents, while salt has over 14,000 different applications from food to the softening of hard water.