New Market Research Report: Botswana Mining Report Q2 2016

From: Fast Market Research, Inc.
Published: Sun Feb 21 2016

The expansion of Botswana's mining industry will be tempered by weakness in global diamond prices over the next few quarters, with the country's largest producer, Debswana, revealing plans to scale back production at two of its mines over the next three years. A sluggish diamond sector will be mitigated to an extent by rapid expansion in thermal coal mining as the government aims to become a net power exporter within the next few years. Growth in thermal coal output will pave the way for the gradual, but long-awaited, diversification of the country's mining sector.

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We have revised our medium-term production forecasts for Botswana downwards this quarter, following the announcement that the country's leading producer, Debswana, will suspend operations at one of its smaller mines, citing the recent collapse in global diamond prices. The company will also downsize output at another facility for a period of three years. With Debswana accounting for the bulk of the country's diamond output, we consequently forecast output to contract by 6.1% in 2016 to 21.8mn carats (mnct). Growth levels will be muted thereafter, growing by 1.4% a year on average through to 2020.

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Nevertheless, we continue to maintain the view that Botswana will become an increasingly important destination for global mining investment due to its stable political and economic environment. In December 2015, Canada's Lucara Diamond Corp announced plans for an expenditure of USD15-18mn on an additional large diamond recovery process at its Karowe mine. The company stated that the mine is estimated to treat between 2.2mn and 2.4mn tonnes of ore in 2016, producing around 350,000ct of diamonds.

In the meantime, the coal mining sector is likely to become a major source of activity, with news in November 2015 that Botswana's government had awarded a contract to build a 300 megawatt (MW) coal-fired power station, as it aims to become a net electricity exporter by 2018. Foreign interest in the country's coal reserves is also growing, with Coal Petroleum and South Africa's Kumvest set to begin construction of a USD4.2bn coal-to-liquid plant in the country in early 2016.

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.

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You may also be interested in these related reports:

- United States Mining Report Q2 2016
- China Mining Report Q2 2016
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