Botswana Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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Botswana Mining Report
Product Price
$1,295.00

BMI View: We expect diamond production in Botswana to grow from 2016, supporting a rise in the overall value of the country's mining sector over the next few years. However, the reliance on this product in Botswana's overall framework is a concern as diamond prices underperform globally and the country's production is estimated to have contracted by 1.6% in 2015. At present, plans to invigorate activity in other sub-sectors, including coal mining, are being held back by a lack of transportation and other infrastructure.

Botswana Mining Industry Value Forecast (2014-2019)
2014e 2015f 2016f 2017f 2018f 2019f
e/f - BMI estimate/forecast. Source: BMI Calculation/UN Data
Mining Industry Value, USDbn 3.01 3.13 3.26 3.39 3.55 3.67
Mining Industry Value, USDbn, % y-o-y 3.99 3.90 4.00 4.25 4.50 3.50

Latest Updates And Structural Trends:

  • We have revised our estimates for Botswana's 2015 diamond production downwards and now estimate output to have contracted by 1.6% in 2015 to 23.42mn carats. Our revision follows news that Diamond output from Botswana's leading diamond miner, Debswana slid 4% in H115, to 12mn carats, with the company cutting their production target for the year by 13.0%, from 23mn carats to 20mn carats. Weak demand from major buyers such as China has left dealers with few options but to slash prices in an effort to clear the supply glut. According to the Rapaport Group's diamond pricing list, average prices for top quality 1 carat stones dropped by about 13% between January 2015 and September. This has trickled down to miners who have had to drop their prices accordingly. China's economic rebalancing and slowdown in luxury spending has contributed to oversupply in the market and prompted mining firms to cut their 2015 production targets. Meanwhile, diamond exports have also fallen steadily over recent quarters as low global prices and lacklustre external demand have lead companies to cut production targets.

  • The recently announced re-commissioning of the Lerala mine will nevertheless provide a long-term boost to Botswana's diamond output. The owner of the mine, Kimberley Diamonds had secured a USD3.8mn loan agreement with China's Zhejiang Huitong Auction Co. to reopen the facility. According to Kimberley's managing director Noel Halgreen, the life of the mine is expected to be seven years will an annual mined output of up to 400,000 carats a year. There is also reported to be significant potential for expanding the mine. The re-introduction of Lerala into Botswana's diamond mining mix follows a series of new additions to Botswana's diamond production mix over the past few years. 2014 saw both the opening of Gem Diamond's Ghagoo mine and the completion of maintenance at Debswana's Orapa mine. Ghagoo is the country's first underground diamond mine and will produce between 250,000 and 300,000 carats in 2015.

  • Shumba Coal has announced plans to develop a solar power station to produce up to 200MW of power in the country. The facility will initially generate 100MW and increase to 200MW over an unspecified period of time. The project involves an initial installation of 400,000 photovoltaic cells in an area of 2sq km. The power plant would supply upcoming mines in the Kalahari Copperbelt, which are currently not connected to the national grid, according to Managing Director Mashale Phumaphi.

BMI Industry View
7
Table: Botswana Mining Industry Value Forecast (2014-2019)
7
Latest Updates And Structural Trends:
7
SWOT
9
Industry Forecast
11
Output To recover In 2016
11
Latest Updates
11
Structural Trends
13
Table: Botswana - Main Diamond Projects
13
Table: Diamond Production (Botswana 2012-2019)
15
Coal: Infrastructure Key To Tapping Growth Potential
16
Latest Developments
16
Structural Trends
17
Table: Botswana - Coal Deposits
18
Table: Coal Production Forecast (Botswana 2012-2019)
19
Industry Risk/Reward Index
20
Botswana Risk/Reward Index
20
Rewards
20
Industry Rewards
20
Country Rewards
20
Risks
20
Industry Risks
20
Country Risks
21
Africa: Major Risks Remain
21
Key Takeaways
21
Latest Revisions
22
Table: Africa - Mining Risk/Reward Index
23
Regulatory Development
24
Table: Africa - Mining Regulatory Outlook
25
Commodities Forecast
27
Commodities Outlook
27
Table: BMI Commodities Price Forecasts
27
Competitive Landscape
28
International & Domestic Key Players
28
Company Profile
30
Global Company Strategy - Norilsk Nickel - Q1 2016
30
Company Overview
31
Company Strategy
32
Table: Norilsk Nickel - Supply Chain Analysis
33
Table: Norilsk Nickel - Key Financial Data
34
Global Company Strategy - Anglo American - Q1 2016
35
Company Strategy
37
Latest Results
38
Table: Anglo American - Financial Data
39
Regional Overview
40
Africa Mining: The Four Key Themes
40
Key Themes
40
Chinese Investment To Continue
40
Iron Ore Price Weakness To Curb Growth
41
Regulatory Uncertainty To Curb Growth
42
Mining To Remain Key Contributor To GDP
44
Methodology
45
Industry Forecast Methodology
45
Sources
46
Risk/Reward Index Methodology
47
Table: Weighting Of Indicators
48

The Botswana Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Botswana Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Botswana.

Key Benefits

  • Use BMI's independent industry forecasts on Botswana to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Botswana's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Botswana.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.