Modern Mining May 2016

COUNTRY FOCUS: BOTSWANA

Commodities downturn takes its toll

With the annual Botswana Resource Sector Conference imminent, Modern Mining’s Arthur Tassell takes a look at the mining scene in Botswana, which is probably the bleakest it has been in years. Botswana’s economy shrank last year by 0,3 % according to Statistics Botswana (a figure which the IMF believes could be an under-estimate), largely as a result of falling mine production due to weak demand for commodities. There are nevertheless some good news stories emanating from the mining sector, particularly in diamond mining, with Lucara’s Karowe diamond mine continuing to impress and the Lerala diamond mine of Kimberley Diamonds resuming production.

I nterestingly, Botswana is now no longer regarded as the prime mining destina- tion for investment in Africa, with the latest (2015) Fraser Institute Survey of Mining Companies placing it only fourth on the continent (after Morocco, Burkina Faso, Ghana and Namibia). Its lower – although still creditable – showing in the survey was over increased concerns over trade barriers, the geological database and the availability of skills and labour. The diamond mining sector accounts for the bulk of Botswana’s mining production by value, with Debswana being by far the biggest pro- ducer. It is targeting a production of 20 million carats this year but this is well down on the 30 million plus carats recorded roughly a decade ago. Reportedly, Debswana cut production by

3 million carats last year because of subdued demand in global markets and has also placed its smallest mine, Damtshaa (near Orapa), on care and maintenance. In the Central Kalahari, Botswana’s only underground diamond mine, Ghaghoo, has also not been immune from conditions in the global economy with its owner, LSE-listed Gem Diamonds, stating in its latest annual report (for the year ended 31 December 2015), that the operation is being downsized “to min- imise the cash to be consumed by this asset. Consequently, a modified target of approxi- mately 300 000 tonnes of ore to be treated has been set for 2016.” More positively, the phenomenal success of Lucara’s Karowe diamond mine continues. Located in the Orapa Kimberlite Field and based on the AK6 kimberlite, Karowe was com- missioned in 2012. It has since proved to be a prolific producer of large diamonds with more than 700 larger than 10,8 carats being recovered during 2015 (mainly from the south lobe of the mine). This included 20 stones larger than 200 carats (of which seven were larger than 300 carats). The 1 111-carat Lesedi La Rona , which was recovered in November last year, ranks as

Production recently restart- ed at the Lerala diamond mine. This photo shows the first bucket of stockpiled ore being tipped into the headfeed bin and primary crusher (photo: Kimberley Diamonds).

28  MODERN MINING  May 2016