Gov’t bans some vegetable imports
Government has decided to ban some vegetable imports from South Africa and other vegetable exporting countries, in a bid to force local food retailers to buy vegetables from local farmers, according to the Ministry of Agricultural Development and Food Security.
Recent figures from Statistics Botswana show that on annual basis local retailers import vegetables worth more than P100 million. Figures further indicate that for the month of September 2021, retailers spent around P24 million in importing vegetables from farmers outside Botswana.
The Ministry of Agriculture last week Friday announced that in its bid to ensure that food retailers spent chunk of money in buying from local farmers, government decided to ban imports of tomatoes, carrots, beetroots, potatoes, cabbage, lettuce, garlic, onions, ginger, turmeric, chilli peppers, butternut, water melons, sweet peppers, green mealies and fresh herbs with effect from the 1st of January 2022; and added that restrictions on the imports will be reviewed every two years.
In a recent statement the Ministry indicated that to ensure continuous and adequate supply of vegetables from local farms and meet national demand for the vegetables, government has initiated subsidies for vegetable farmers. The statement indicated that the subsidies are intended to fund programmes expected to cushion farmers from harsh climatic conditions, increase production from farms and ensure good agricultural practices in vegetable farming in the country. “This ban will be enabled by the reviewed horticultural impact accelerator subsidy to increase vegetable production, mitigate against climate change effects and ensure good agricultural practices,” reads the statement in part.
In the statement the Ministry indicated that the new Economic Inclusion Act, that compels private sector entities to have supplier development programmes with targeted citizens or targeted citizen owned enterprises, will be used to ensure that retailers buy vegetables from local farmers. “The restriction on vegetable imports will be strengthened and supported by the recently passed legislatures being the 2021 Citizen Economic Inclusion Act and Public Procurement Act,” said the Ministry. The decision to ban vegetable imports is government’s new priority to develop the agricultural sector and value chain on food production, according to the Ministry of Agriculture.
Commenting on the ban, a leading group of local farmers which initially approached government to discuss the idea of permanent restriction of some vegetable imports, expressed confidence that local commercial farmers can meet national demand for vegetables such as, tomatoes, potatoes, cabbage, carrots, beetroot and green pepper, as the crops can easily grow on Botswana soils. In a recent update the farmers indicated that there are cropping plans which are going to be used to ensure continuous production and supply of the vegetables during the period of ban. The farmers said they have been doubtful to invest and continuously produce more, because there was no guarantee that food retailers will buy their produce.
In an interview with BusinessPost, a locally based commercial farmer and agribusiness analyst Michael Diteko expressed confidence that the ban on vegetable imports could benefit farmers in the country. “The benefits are guaranteed off take of vegetables and easy access to funding as financial institution will develop appetite for the industry,” he said.
On the other hand, he warned that if government does not ensure that farmers comply with good agricultural practices and hygiene standards, there could be a prolonged supply of poor quality vegetable products. He added that following the ban, there could be an increase in smuggling of produce especially from South Africa which is a threat to our bio-security because Botswana borders are porous.
Business
ODC 2021 sales revenue set to surpass P10bn
Okavango Diamond Company(ODC), the 100 percent Botswana Government owned rough diamonds marketing and sales company is recovering well from the 2020 economic downturn. ODC, established in 2012 as a homegrown entity to sell Botswana diamonds outside De Beers price book and channels has so far registered sales revenue exceeding US$830 million for its trading year 2021.
This was achieved in the first eight (8) months of the current financial year 2021, a 484% jump from the 2020 sales revenue of US$181 million. The 2020 sales revenue was a 48% decline from US$371 million sales revenue in 2019). The decline in 2020 was mainly due to several cancelled sales (and ODC not generating any revenue) since the end of March 2020 as markets showed signs of uncertainty, because of to the COVID-19 pandemic.
ODC started the year 2020 on such precarious grounds and was unfortunate given that 2019 was also a weak trading year for the industry and by extension ODC. ODC a key player in rough diamond trading in the world, anticipates growth until at least the end of Q1 next year. “We are still left with the last quarter of our 20201 trading year, so we anticipate out sales revenue to reach US$1 billion, and if you convert that to Pulas, that’s a lot of money,” said Okavango Diamond Managing Director, Mmetla Masire.
Masire said industry profitability remains healthy and demand throughout the diamond pipeline remains robust with slight softening in some categories of diamonds. Furthermore, overall liquidity is generally good, and the state-owned entity believes that this healthy trend is positive news that was needed given the negative impact of the COVID-19 pandemic that almost crippled the entire industry.
“As you are all aware our diamonds are sourced from Debswana, Botswana’s flagship diamond mining company that accounts for over 98% of Botswana’s diamond production. Therefore, when Debswana sneezes, ODC catches a cold, we are therefore, relieved, and happy to see that Debswana has recently increased production and look forward to future increases,” ODC’s Board Chairman, Dr Gape Kaboyakgosi said in his welcome remarks.
According to the ODC, its sales revenues showed improved growth this year, due to a lot of positive market dynamics and the company’s response to being able to read their customer buying behaviour as accurately as possible, and make informed decisions about how, when and what they should sell.
The company explained that last year in June, it took very radical decisions about what ODC would and would not be prepared to sell and at what prices as this was validated by the company’s market intelligence and its perceptions of the market. “To date ODC has continued to be very careful in managing its diamond inventory to ensure that they are not encumbered by excessive stock which is difficult to sell in a downward market,” explained Masire.
The company has seemingly so far been making the right decisions to ensure it protects the long-term sustainability of its business. “Early on, prior to the government lockdown, ODC started pre-emptively planning its business continuity framework to handle Covid-19 situation while helping generate sustainable economic benefits for Botswana and Batswana. Our vision is to be to be a world leader in the sales and marketing of natural diamonds, and we are excited by the journey ahead,” Masire said during the business update press briefing.
In addition, ODC board Chairman, Dr Kaboyakgosi explained that “ODC has proven to be an agile organisation that can pivot in line with prevailing operating conditions. The impact of COVID-19 on the whole world and the perations of the global diamond market couldn’t have been foreseen and yet ODC has managed to not only survive the pandemic but to thrive with record sales volumes.”
ODC earned US$110 million during its October Spot Auction sale which coincided with the company’s participation at the world-acclaimed EXPO 2020 Dubai. Prior to the October sale, ODC’s September Spot Auction sale generated US$123 million. The September 2021 sale is said to represents the largest one-day Diamond Auction sale ever conducted for rough natural diamonds, however, ODC recently broke the September record again.
Business
De Beers returns to Angola
De Beers Group, the global diamond mining giant is plotting a comeback to Angola, one of the world’s diamond rich countries. On Tuesday De Beers – 15 % owned by Government of Botswana, announced it has applied to conduct exploration activities in north-eastern Angola.
A statement from the London, United Kingdom headquarters explained that this move comes after “substantive and consistent reforms implemented by the Government of Angola that enable the country’s diamond endowment to underpin transformative socio-economic growth for local communities”.
Following the Mineral Rights application submission, De Beers Group and the Government of Angola will open discussions in an effort to agree a Mineral Investment Contract, which would establish legally binding terms and conditions to be met by both parties for activities in north-eastern Angola.
Bruce Cleaver, CEO of De Beers Group, said: “Angola has made significant progress towards creating a stable and more predictable investment environment in which the people of Angola can directly benefit from increased foreign direct investment. As a result of this – and with De Beers’ recognised Building Forever framework for creating lasting positive socio-economic impact for communities, our innovative FutureSmart Mining programme that is transforming mining technologies to deliver a significantly reduced environmental footprint, and our proven track record of establishing responsible and mutually beneficial partnerships in the region – we look forward to positive and transparent discussions with government about the possibility of future investment.”
“In line with the OECD Due Diligence Guidance for Responsible Supply Chains, we believe that responsible foreign investment by the private sector can be an important catalyst for social change in countries working to reform their economies. Should we discover an investment opportunity in the region, we will apply the same proven governance, social impact and environmental framework that has contributed to long-term and sustainable socio-economic development in the neighbouring countries of Botswana and Namibia,” Cleaver said.
De Beers Group has a long track record of operating responsibly in southern Africa, including long-standing and highly regarded operations in Botswana and Namibia. De Beers Group’s diamond operations have played a significant role in helping grow those countries’ economies in particular, building thriving communities, creating meaningful social outcomes and contributing significantly to the national fiscus.
The company which is 15 % owned by Government of Botswana left Angola in 2001 after talks failed to renew business agreements with the government. De Beers has however been prospecting a comeback and plotting a return to Angola since 2014. Angola is one of the world diamond rich countries with chunk of untapped resources. It is the world’s sixth-biggest producer and third on the African continent after Botswana and Democratic Republic of Congo (DRC).
According to the African Diamond Council, the diamond industry in Angola represents nearly 1.2 billion euros in annual production. Angola produced 8 million carats of rough diamonds in 2020, a 15.4% decrease from 2019’s 9.4 million, according to Angola’s Ministry of Mineral Resources and Petroleum.
In a bid to diversify its revenue stream away from overreliance on oil, Angola enacted reforms to its mining sector geared towards improving the regulatory environment, the president says. The reforms included a new model for governing the sector, and the creation of the National Agency for Mineral Resources tasked with regulating, inspecting and promoting diamond mining.
Business
Botswana to record increase in copper production
A UK based research firm, Fitch Solutions has projected that with effect from next year Botswana could start recording increase in copper production, as copper mines in the country revive production.
Fitch Solutions has indicated that copper production in Botswana could rise, following increase in copper buying prices in the export market. Copper prices are projected to increase from around USD 6000 per tonne recorded this year, to around USD 8500 per tonne in the next ten years, according to recent figures from Fitch Solutions.
The company has indicated that motivated by increasing buying prices for copper, mining companies in Botswana are reviving idle mines while some are developing new copper mines and added that copper production in the country could almost double, from 35 000 tonnes recorded this year to 60 000 tonnes in 2022. The company has projected that production could rise from 60 000 tonnes in 2022 to 69 500 tonnes in 2023 and reach 72 000 tonnes in 2024, 73 000 tonnes [2025], 75 000 tonnes [2026], 76 000 tonnes [2027], 77 000 tonnes [2028], 79 000 [2029] and 81 000 tonnes in [2030]. “The interest in Botswana’s significant copper reserves is growing amid the rally in copper prices. We forecast Botswana’s copper mine production to revive after a five-year lull and to ramp up in 2022-2030, said the company researchers.
In a recent research report on Botswana’s copper industry the researchers said investment in Botswana’s copper sector is growing, as mining companies such as Sandfire Resources and US miner Khoemacau Copper are developing copper mines in the copper rich Kalahari Copper Belt. “Botswana now seeks to revive its copper sector. In the north east of the country, the 1000km long Kalahari Copper Belt is one of the emerging but most under-explored copper-silver regions in the world. With copper prices at record highs and bright demand prospects amidst the Green Transition, there is an incentive for countries with large copper resources to develop new projects and for miners to consider untapped copper reserves,” said the researchers.
Khoemacau recently began production of its first copper from its Boseto mine, while Australian firm, Sandfire Resources this year was granted a mining license for its Motheo copper project located in the Kalahari Copper Belt and expected to operate for 12.5 years. Sandfire Resources has indicated that a study for expansion of Motheo project proves positive. “Sandfire Resources has announced their intention to advance plans to increase the size of its Motheo copper project,” said Econsult the locally based research company in its recent quarterly update on Botswana’s mining update.
The Minister of Minerals, Green Technology and Energy Resources, Lefoko Moagi, this week told parliament that Canada’s Premium Nickel Resources (PNR) is preparing to purchase the idle BCL copper mine from Botswana’s government with the aim of resuming copper production within the next three years.
Media reports show that Botswana produced around 39,000 tonnes of mined copper on annual basis over 2009-2012 and production peaked to 51,300 tonnes in 2013 before the collapse in copper prices. Production trended lower, between 2014 and 2020. Total copper production was around 9 000 tonnes in 2015, with no production in 2016, 1 200 tonnes in 2017, 1 500 tonnes 2018, 500 tonnes in 2019 and 2020.