MDCB looks to broaden mining investments
Pauline Dikuelo | Tuesday February 14, 2023 06:00
The company also holds convertible debt in Minergy Ltd, the coal producer based in Medie. MDCB chief investment officer, Modise Mokone told BusinessMonitor that the company was analysing the opportunities available in critical minerals, rare earth metals and other commodities and companies in the country’s mining sector. “We are looking at investments in the battery and critical metals space as well as investments within the investees that we currently have,” he said in an interview here, on the sidelines of the Mining Indaba. “We are looking across the board to grow the portfolio which is part of our mandate. “Our mandate is to grow, optimise and diversify the investment portfolio. “From those three assets that we have, our strategy over the next five years is to significantly grow that and this will be through finding those assets locally that we can look to diversify away from the two coal and diamond asset that we have.”
By law, government is entitled to purchase up to 15% equity in any entity granted a mining licence in the country. However, the government has generally stayed clear of direct equity in mining companies although senior officials have expressed interest in entities such as Lucara. With several major mining developments gathering momentum in the country such as Khoemacau’s and Sandfire’s mines in the west as well as the resuscitated Mowana and BCL mines in the north, speculation has risen on whether government will move to take up an equity position. “We are looking across the board, engaging with all parties without speaking specifically,” Mokone said.
“Our mandate also speaks to facilitating the mining sector and some of these entities, we may not necessarily invest in them but we can facilitate them whether through helping them get the right processes or bringing in other partners to come in and work with them.” The chief investment officer said MDCB would continue to support its coal investments in Morupule Coal and Minergy, with a focus on moving towards cleaner processes and sustainability. MDCB and the Botswana Public Officers Pension Fund have been the major financiers of coal and related projects in the country, backing the industry at a time when other funders have blacklisted fossil fuels. “We will be looking to support our investments in Morupule and Minergy. “The (funding) market was drying up but of late we have seen financiers reconsidering the hard line stance that they had taken maybe 12 months ago. “There are still opportunities and people in the market who are engaging. “What’s key is that even as you look to support the carbon minerals, it must be in a sustainable manner which means having the right Environment, Social and Governance principles in place that will really attract the right capital.” He added:
“Morupule articulated their direction through the 1-3-27 strategy, which is a bold ambition which will require funding and we will be working with them to see how to ensure that the strategy is implemented.” Mokone said while MDCB’s focus was on local opportunities, going into the medium to long-term, the company would assess the possibility of equity investments in the regional and international markets.