Window for citizens to buy shares in new mines
Brian Benza | Friday August 19, 2016 18:00
Deputy permanent secretary in the ministry of minerals, energy and water resources, Nchidzi Mmolawa yesterday told a Stanbic Bank Mining and Metals conference that plans to empower Batswana are part of the changes contained in the review of the Minerals Policy.
Some of the changes that headline the minerals policy review include an increase in the percentage that government can buy in new mining ventures from the current 15% to 26%.
“We plan to increase government optional shareholding window after realising that the 15% does not carry much weight in terms of influencing the direction of the company. At 26%, the Companies Act, at least, allows you to exercise some minority rights. But in the event that government opts not to buy the 26%, the plan is to pass on that option to Batswana to buy the shares,” he said.
Although the law currently allows government to buy a 15% shareholding in any new mining project with an option for a higher stake in diamond mines, government has of late foregone the option citing various reasons. Some of the mining projects that government has passed on the option to buy a stake in recent years include the Lerala Mine, Boseto Mine, Karowe Mine, BK11 Mine, Ghaghoo Mine and of late the Khoemacau’s Qhoree Mine in Ngamiland.
“We have not exercised that option in recent years for various reasons some of which turned out to be good decisions as certain mining ventures ended up closing shop largely due to reasons that we had pointed out at evaluation stage. But there are also some of the projects that, in hindsight, we now wish we had bought a stake such as the Karowe Mine,” he said.
Some of the projects that are likely to materialise into new mines in the near future include First Quantum’s Sese Coal Mine, Jindal’s Mmamabula coal mine, Shumba Energy’s Mabesekwa and Sechaba Coal Mines and A-Cap’s Letlhakane Uranium Mine.
Amongst some of the changes that will be brought in the minerals policy review include the development of cluster industries around mining projects as well as increased participation by citizens in supplies and procurement for mines.
Government is currently consulting on the policy review with a view to table the Mines and Minerals Bill during November sitting of Parliament. Government currently has shareholding in BCL (100%), Botash (50%), Morupule Coal Mine (50%), Debswana (50%), De Beers (15%), and DTCB (50%).
Shareholding in BCL, Morupule Coal Mine and De Beers are in the process of being transferred to the newly formed Minerals Development Company of Botswana (MDCB) with the remaining three companies to follow.
According to MDCB CEO Paul Smith, their long term mandate allows them to look for new investment opportunities in Botswana as well as internationally.
“We will not be primary investors where we acquire mineral rights and do the mining. The plan is for us to be a value investor where we look for quality assets and be an active investor both locally and globally,” Smith told the conference.