DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/09de2a/botswana_mining_re) has announced the addition of the "Botswana Mining Report Q1 2011" report to their offering.
The Botswana Mining Report provides industry professionals and strategists, corporate analysts, mining associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Botswana's mining industry.
Discovery starts construction on Boseto copper project In December 2010, Australian copper miner Discovery Metals plans to commence construction on its Boseto copper project in the Kalahari copper belt, following the completion of a bankable feasibility study (BFS) for the project. In August 2010, Discovery announced a JORC-compliant initial reserve estimate at Boseto of 24.1mn tonnes (at 1.3% Cu and 16.7 g/t Ag above a cut-off grade of 0.3% Cu). The total JORC-compliant mineral resource for Boseto is 102.8mn tonnes, at 1.4% Cu and 17.3g/t Ag, containing 1.4mn tonnes of copper and 57mn oz of silver.
Production at Boseto is planned to commence during Q112. To that end, construction will start work on the project during 2010, with the BFS calling for throughput of 3mn tonnes per annum (tpa) of copper and silver ore over five years, according to a recent report by Mining Weekly. Beyond this initial time frame, Discovery believes that Boseto can support both open-pit and underground mining over a 15- year mine life.
Capex for the project has been estimated at AUD175mn by the company. To help fund the development of Boseto, in November 2010 Discovery announced that it would be carrying out an AUD142mn institutional placement and rights issue of new shares. The institutional placement successfully raised AUD51mn at the start of November, with the rights issue (which will close in December 2010) to raise around AUD91mn, according to the company.
Clearly, the launching of copper production at Boseto will do much to boost overall Botswanan production levels of the base metal. To that end, we have made some upward revisions to our copper production and export forecasts this quarter.
Botswana Still Favoured by BMI Botswana remains the highest-rated African country in our newly-updated Business Environment Rankings for Q110, with a score of 65 points. The country has a stable political situation and a well developed mining sector, backed up by a sound regulatory framework.
Over our forecast period from 2011-2015, we anticipate the mining sector to show an average growth rate of nearly 8% per annum, as new projects in the copper, uranium and coal sectors come onstream. Moreover, tax rates remain relatively low on a regional basis and the country has relatively flexible labour regulations, which should also bolster growth. Our positive view on Botswanan mining is shared by the influential Fraser Institute, which placed Botswana in eighth place in its mid-year Policy Potential Index, published in August 2010.
Changes to mining policy ahead? In September 2010, there were media reports that Botswana may be looking to make changes to its current mining policy. Mining Weekly cited the outgoing permanent secretary at the Ministry for Minerals, Energy and Water, Gabaake Gabaake, who stated that the new minerals policy objectives will ensure that economic benefits for Botswana are maximised from the resources recovery, while enabling private investors to earn competitive returns. Gabaake also hinted that the country would look to speed up the issuing of prospecting licences to within 30 days of application (down from 60 days) and also to issue diamond export permits within two days.
BMI will monitor developments on the ground over the course of 2011 and report on any legislative changes as and when they occur.
Country Overview Exploitation of rich mineral reserves, especially diamonds, has been a significant driver of Botswana's economic growth. Diamonds, along with copper and nickel, are major focus areas in metal and mineral exploration, and earn more than three-quarters of the country's export revenues. More recently, coal and uranium have also emerged as key future revenue generators for the Botswanan mining industry. The authorities in Gabarone have an impressive track record in garnering the maximum benefit from the production of diamonds, and we expect this trend to continue over the coming decade. Diamonds currently dominate the economy but, with output set to decline over the medium term as reserves dwindle, the government has enacted a number of measures to ensure that revenues are used to aid diversification. For example, a fiscal rule has been adopted which states that mineral revenues must be used to expand the economy's productive base, rather than fund consumption expenditure. Owing to this rule and other initiatives enshrined in successive six-year National Development Plans and the long-term policy Vision 2016, growth in the non-mining sectors is burgeoning.
Industry Forecast We are positive on the outlook for the Botswanan mining sector over our newly-extended forecast period to 2015. Diamond output will remain the mainstay of Botswanan mining production, however, there are also key mining projects being developed in the copper, uranium and coal sub-sectors. We believe that the sector can show an average annual growth rate of 7.7% over the 2011-15 period, with the industry reaching a value of US$12bn in 2015."
Companies Mentioned:
- African Copper
- African Diamonds
- De Beers Botswana Mining (Debswana Mining)
For more information visit http://www.researchandmarkets.com/research/09de2a/botswana_mining_re