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An outlook on Botswana’s mining sector

BMI Research’s forecast for Botswana’s mining sector through to 2019 has indicated the country will carry on attracting global investment, which will help the country’s mining sector despite a decline in real GDP from 4.4% in 2014 to 4.1%. For example there are current plans for a 300 MW coal-fired power plant with an estimate cost of US$750 million to be put in place.

Diamonds are the main source of revenue for Botswana’s mining sector with new potential projects from Gem Diamonds, Diamond Corp. and Debswana.

However, coal is anticipated to be a key part of the wider mining sector and forecast production will see a rise in the coming years. BMI’s research indicated Botswana’s coal sector has a strong growth potential since it has the largest coal reserves in Africa yet it is largely undeveloped. Output forecast is expected to increase at double-digit rates over BMI’s 2015 – 2019 oultook period with companies, including Anglo America, Exxaro, African Energy and CIC Energy driving a fast growth from a low base.

However a lack of diversity will leave the country’s mining sector weak in comparison with competitors. It is reported Botswana is increasing its efforts to expand its mining sector. The government is planning to develop production of non-core minerals, such as copper, gold and nickel. Yet BMI believe this diversification may prove difficult due to a weakness in global metal prices.

BMI expect Botswana’s mining industry to be supported by diamond production as well as strong growth in coal over the long term.

source: http://www.worldcoal.com