The mining industry has over the years played a pivotal role in the economy of the country and is a significant contributor to the Gross Domestic Product. It is estimated that in 2008 it contributed over 35% of Botswana’s GDP with Diamonds being the major contributor.

The industry also provides employment for approximately 18 000 people. There has been significant growth in the industry over the past 5 years with a number of new mines coming on stream.
Botswana’s portfolio of mineral reserves includes diamonds, coal, copper, nickel, cobalt, gold, soda ash and lately uranium deposits have been discovered and targeted for production.

During 2008, commodity prices were increasing at a very steady rate for the better part of the year until the cross-section of the industry took a hard knock in October as prices tumbled due to the global economic melt down. As a result, the whole industry is now beset by all manner of survival challenges brought about by the Global meltdown

1. Mineral revenue to Government and Exports

1.1 Mineral Revenues
During 2008, mineral revenues (royalties, dividends, annual lease charges and sundries) collected were about 9% higher than in 2007. The increase is mainly attributed to diamonds (15%) and gold 102% due higher commodity prices in the first 10 months of the year. 
 

1.2 Mineral Exports
The table below depicts Mineral exports in 2008 and 2007. Diamonds, Copper-Nickel and Soda Ash exports for 2008 were lower than those of 2007.

2. Mining Industry Updates

2.2 Diamonds
During 2008 total diamond production was 32,6 million carats from the four Debswana Diamond Company Mines (Jwaneng, Orapa, Letlhakane and Damtshaa Mines). In addition 10 613 carats were produced from DiamonEx Botswana which commenced construction of its Lerala Mine in 2008.

A mining licence was issued to Boteti Exploration, a joint venture between African Diamonds, De Beers Prospecting Botswana and Debwat Explorations in October 2008 for the AK06 kimberlite deposit near Letlhakane. Once operational, this mine is expected to produce about one million carats per year.

Gope Exploration, a 100% subsidiary of Gem Diamonds, also submitted a mining licence application for the Gope kimberlite deposit. The licence is expected to be issued during 2009 pending the conclusion of the negotiations of the terms and conditions of the Mining Licence under section 51 of Mines and Minerals Act.

2.3 Base Metals (Copper, Nickel and Cobalt)
Total matte production in 2008 (BCL Limited and Tati-Nickel Mining Company) was 61, 686 tonnes containing 28,940 tonnes nickel, 23,146 tonnes copper and 337.09 tonnes cobalt.

Messina Copper Botswana a subsidiary of African Copper PLC commissioned Mowana Mine near Dukwi and commenced commercial sales of concentrate during the last quarter of 2008 through an off-take agreement with MRI Trading AG.

Currently, Mowana mine has suspended operations as a result of the global financial crises and is undergoing financial restructuring. 

2.4 Soda Ash and Salt
Soda ash and salt production in 2008 amounted to 263, 566 tonnes and 170,994 tonnes respectively.

Botash has produced lower year-end forecasts due to customers in the metal alloy industries decreasing consumption significantly this year.
 
2.5 Coal
Currently, Morupule Colliery is the only operational coal mining entity in Botswana. The Colliery’s run of mine production for 2008 stood at 925 142 tons of coal, some 12% above 2007 production.

A coal washing plant was commissioned at Morupule Colliery at the beginning of 2008 and produced 115 876 tons. The plant is run on a three shift basis to improve output.

Morupule Colliery is embarking on an expansion project to increase production from 1 million to 4 million tonnes per annum in support of Botswana Power Corporation’s power generation expansion project at the Morupule Power Station. Botswana Power Corporation’s 600MW power generation expansion requires additional supply of 2.6 million tons of coal per annum. Commissioning of the Morupule Colliery expansion project is expected to commence in 2011.

2.6 Precious Metals
Mupane Gold Mining produced a total of 3,176 kg of payable gold.

2.7 Crushed stone, Gravel, Clay and Sand
During the year, seventy three (73) companies, eleven (11) of which operated fourteen quarries, extracted a total of 3.995 million m3 of crushed stone, gravel, clay and sand compared to 4.484 million m3 in 2007. Consumption for these materials depends on construction industry activities.

3. Safety
The mining sector places great emphasis on Safety, Health and Environmental issues.  The graph below shows that the safety performance of the mines in terms of LTIFR has gradually improved over the years.  
 

4. Mining Labour
In 2008, the total labour force in the mining industry averaged 18,163 compared to 16,380 persons that were recorded in 2007. This represented an overall increase in employment of about 10.89% largely attributed to the increase of employees at BCL due to the smelter shutdown and Tati Nickel engaged in the construction of the new DMS plant and Botswana Metals Refinery, as well as the start of new mining operations such as Messina Copper and DiamonEx.
 

5. Impact of the Global Economic melt down on the Mining Industry
The global economic melt down has severely impacted on the Mining Industry. In Botswana the Diamond Industry has been the hardest hit with Diamond sales falling drastically in October 2008. This has had a very negative  impact on government revenues. It is known that DiamonEX  put its Lerala Mine under judicial management. African Copper has suspended all development work at its Mowana Mine and prospecting activities generally appear to be on the decline.

Market conditions are still highly volatile and this makes recovery predictions very difficult. During these difficult times the mining houses are looking at cost reduction, cash preservation, and high performance based strategies to ensure survival.

The global financial crisis has also impacted negatively on Morupule Colliery. Some of its customers were severely affected and reduced coal off-take from the Colliery. The Colliery is therefore seeking new markets especially for raw coal.