Botswana remains highly dependent on the diamond sector but continues to support the development of the other mineral deposits it hosts, writes Dr Nicolaas C Steenkamp.

Image supplied by Freepik.com

Image supplied by Freepik.com

The economy of Botswana is largely driven by mining activities and had to navigate a number of challenges during 2023. The government however remains committed to expanding and supporting the mining sector to re-attract investment in deposits outside of the diamond sector and restore confidence in the base metal operations.

The Botswana government expected mineral royalties to fall to 4.5-billion Pula (USD3.4-billion) in 2023, from 6.1-billion Pula in 2022. However, Botswana has reclaimed its spot as Africa’s no. 1 mining jurisdiction, according to the Fraser Institute Annual Mining Survey. The country was ranked first in Africa for policy attractiveness, outpacing its SADC partners.

The mining legislation was also amended in 2023, with tightened up laws on mine rehabilitation, requiring mining companies to provide more detailed plans and financial guarantees for mine closure and rehabilitation. The government has also introduced a new environmental impact assessment (EIA) framework for mining operations. This framework is designed to ensure that potential environmental impacts of mining activities are properly assessed and mitigated before development commences.

In meeting the new ESG requirements, there has also been a greater emphasis on community engagement and benefit-sharing in mining projects. Companies are now required to establish community development plans and consult with local communities throughout the mining lifecycle. This is to ensure that mining activities bring tangible benefits to the people living in and around mining areas. In addition, it has started introducing measures to enhance transparency and accountability in the mining sector. This includes strengthening reporting requirements for mining companies and establishing an independent mining watchdog body.

Pushing the regional move towards domestic beneficiation, the Botswana government is encouraging the development of downstream industries related to mining, such as mineral processing and beneficiation. This is to reduce the landlocked country’s reliance on exports of raw minerals and add value to its mineral resources.

Botswana’s diamond production was expected to decline by 1% in 20231, according to government estimates. This is due to a number of factors, including a decline in global diamond demand and the depletion of high-grade ore at some of the country’s mines. Despite the decline in production, Botswana earned USD4.588-billion from diamond sales in 2022.

De Beers, the world’s largest diamond producer, has indicated that its joint venture partnerships with Botswana is “fair, since it has been under pressure to renegotiate its deals with the country, which were claimed to be too favourable to De Beers”. Lucara Diamond, the operator of the Karowe diamond mine in Botswana, has secured new orders from WEC Projects. The orders are for the construction of a new tailings storage facility and a water treatment plant at the mine. The sinking of the new ventilation and production shafts have however over-run due to unforeseen sinking issues.

Debswana announced plans to enhance its technical capabilities with an autonomous drilling solution. The company has partnered with Huawei to develop a system that will use artificial intelligence to automate the drilling process.

There are currently two major copper projects active in Botswana. The Motheo Copper Project – an open-pit mining operation located in Western Botswana – is being developed by Sandfire Resources. It is currently in production, having produced its first copper concentrate in May 2023. The project will target the T3 and A4 deposits, which are estimated to contain a total of 1.6 billion tonnes of ore grading 0.8% copper. The Motheo project has an initial processing capacity of 3.2 million tonnes per annum (mtpa), which is expected to be expanded to 5.2mtpa by the end of 2025. Wood Mackenzie forecasts that Botswana’s copper output will increase by 25% in 2024, driven by the expansion of the Motheo Copper Project.

The second is the Lobatse Copper Project (formerly BCL Mine) which was acquired by Premium Nickel Corporation (PNRC) in 2021, and the project is located in the Central District of Botswana. It encompasses two fully permitted, Ni-Cu-Co mine redevelopment projects: the Lobatse West Mine and the Lobatse East Mine. The Lobatse West Mine is currently under development and is expected to commence production in 2024. The Lobatse East Mine is in the feasibility study stage and is expected to be developed in the later stages of the Lobatse Copper Project. The combined mineral resources of the Lobatse West and Lobatse East Mines are estimated to be 1.5 billion tonnes grading 1.2% copper, 0.5% nickel and 0.2% cobalt.

Gold production is still driven by the Mupane Mine, located in the Central District of Botswana, and is the only operating gold mine in the country. It is owned and operated by Firestone Diamonds and produces approximately 100 000 ounces of gold per year.

Gold exploration is heating up with the Tati Gold Project, located on the Tati Greenstone Belt near Francistown, Botswana, and is being explored by Power Metal Resources. The project holds significant potential for gold mineralisation, with high-grade gold intercepts discovered in recent drilling campaigns. The Bokaa Gold Project, also located on the Tati Greenstone Belt, is being explored by Okavango Resources. The project is known for its historical gold production, with past mining operations yielding over 400 000 ounces of gold. Furthermore, the Mmadinare Gold Project, in the Central District of Botswana, is being explored by African Energy Resources. The project holds the potential for large-scale gold mineralisation too, with historic gold production dating back to the 19th century. The Giraffe Gold Project in the North East District of Botswana, is being explored by Discovery Metals. The project has located what it believes to be several gold-bearing quartz veins, with promising results from exploration drilling. Goldman Sachs forecasts that Botswana’s gold output will increase by 5% in 2024, supported by new projects coming on stream.

The country is also looking to further secure its fossil fuel energy resources, with the Mabasekwa Coal Project in the Central District of Botswana and is being developed by Shumba Energy. This is expected to produce 350 000 tonnes of coal per year. Moungo Coal in the Northwest District of Botswana is being developed by African Energy Resources. The project is expected to produce 750 000 tonnes of coal per year. The Tati Coal Project is found in the North East District of Botswana and is being explored by Power Metal Resources. The project holds the potential for a large-scale coal deposit, with initial estimates indicating an in-situ resource of over 500 million tonnes of coal.

The race to secure critical minerals for the renewable energy sector has led Duane Exploration to conduct exploration activities at the Kalahari Rare Earths Project, located in the Central District of Botswana, where the project has identified a number of geochemical anomalies that suggest the presence of REE mineralisation. At the same time, Mandalay Resources is exploring the Selkirk REE Project, also located in the Central District. The project hosts a large area of granitic rock, which is often associated with REE deposits. Power Metal Resources is exploring the Matsitama REE Project. The project has identified a number of REE occurrences, with promising results from geochemical and geophysical surveys. Standard Chartered forecasts that Botswana’s rare earths output will increase by 10% in 2024, driven by the development of new projects.

African Energy Resources is exploring the Selkirk REE Project adjacent to their Moungo Coal Project in the Northwest District of Botswana. The project holds the potential for a large-scale REE deposit with initial estimates indicating an in-situ resource of over 300 million tonnes containing significant amounts of REEs.

Various iron ore and manganese projects are also being developed. The Kopje iron ore project is being pursued by Power Metal Resources. To date, the project has an estimated resource of 60 million tonnes of iron ore grading 60% Fe. Whereas the Mmamabula iron ore project is being developed by African Energy Resources, with an estimated resource of 100 million tonnes of iron ore grading 56% Fe. Lastly, the Nxamasera iron ore project is being explored by Kalahari Resources and has an estimated resource of 40 million tonnes of iron ore grading 61% Fe.

The Selkirk manganese project is being driven by Mandalay Resources, with exploration results indicating an estimated resource of 120 million tonnes of manganese ore grading 30% Mn. Other manganese exploration projects include the Matsitama manganese project located in the North East District again backed by Power Metal Resources, where results suggest an estimated resource of 20 million tonnes of manganese ore grading 27% Mn. Finally, the Tati manganese project of Kalahari Resources has shown an estimated resource of 100 million tonnes of manganese ore grading 29% Mn.

Significant strides have also been made by Giyani Metals in the development of the K-Hill manganese operations. The company announced a 310% increase in the indicated resources at the K-Hill Project. The current indicated resource is 163.1 million tonnes grading 16.1% manganese (Mt% Mn). This was followed by the installation of the crystallisation unit at its demonstration plant in Botswana. The crystallisation unit is a critical piece of equipment for the production of high-purity manganese sulphate monohydrate (HPMSM), which will be the primary product of the K-Hill Project. The plant has successfully produced HPMSM with a purity of 99.9%, which meets the specifications for battery-grade HPMSM. Work on the optimised Feasibility Study (FS) commenced in Q4 of 2023. The FS will provide a more detailed assessment of the project’s economics and technical feasibility.

The mining sector in Botswana is set for a strong year in 2024. The sector is expected to continue to grow in the coming years, as Botswana diversifies its mineral production and develops downstream industries.

Reference:

  1. At the time of compiling this article in December 2023.
Dr Nicolaas C Steenkamp is an independent consultant, specialising in geological, geotechnical and geometallurgical projects as well as mining project management. Image credit: Dr Nicolaas C SteenkampAbout author: Dr Nicolaas C Steenkamp is an independent consultant, specialising in geological, geotechnical and geometallurgical projects and mining project management. He has over two decades of industry experience with global exposure. (ncs.contract@gmail.com)