Debswana Diamond Company (Proprietary) Limited Debswana Update to

Debswana Diamond
Company (Pty) Ltd
The Role of Debswana in
Botswana’s Economic Development
Mr Balisi Bonyongo, Debswana
Proprietary and Confidential
Page 1
To share the story of Debswana and it’s role in the
economic development of Botswana
Proprietary and Confidential
Page 2
Francistown as a leading Economic Hub
 This Forum is about development and investment
opportunities in the Greater Francistown area. We are here
to “share strategies and discuss structures aimed at creating
a conducive investment climate for this region, to strive to
project and position the City and the region as the lead
economic hub in southern Africa by 2022.”
 This is an ambitious aspiration, and it needs to be. It is also
coming at the right time with Botswana attempting to
reposition itself to find new engines of growth in the
Proprietary and Confidential
Page 3
The time is now as Botswana attempts to find opportunities for economic growth and
employment creation
One of the 7 themes of the 2014 / 2015 National Budget is
“Growing the Economy and Employment Creation”
Proprietary and Confidential
Page 4
The success story of Botswana is synonymous with diamonds and Debswana has
played a significant part of that story
 One of the poorest countries in the world
at independence in 1966
 Mining sparked a period of sustained
economic growth and…
 …in four decades post independence the
country has emerged as a middle income
developing country
 Diamonds and the Debswana Diamond
Mining Company has been central to this
success story
Proprietary and Confidential
Page 5
Diamonds have been a major source of wealth for Botswana since the opening of
Orapa Mine in 1971
 Diamond exports account for a significant proportion of total
exports from Botswana
 Revenues from diamonds form a major part of government
 High rate of public investment by the government; (infrastructure,
health and human capital) have channeled revenue from minerals
to domestic assets
 Diamonds are a significant contributor to the GDP
Proprietary and Confidential
Page 6
The discovery of diamonds and other minerals has clearly been a catalyst for
Botswana’s success…
It has been the visionary leadership of the founding leadership of the country to create an environment
conducive to “smart private – government partnerships”
Ownership of mineral assets remains with the state, leaving company management in the hands of
private investors
Debswana Diamond Company is today a model for successful Public – Private Partnerships
Proprietary and Confidential
Page 7
The legislative and policy framework for mineral exploration, mining and mineral
processing in Botswana has continuously been reviewed to make it more
 The enactment in 1999 of a new mining code that streamlines licensing and enhances security of
 The reduction of the fiscal burden on marginally economic mines
 Variable Income tax rate which is based on project profitability and 100% capital redemption
 Secure title to mining rights for exploration companies
Proprietary and Confidential
Page 8
This has enabled the diamond sector to grow and Botswana is today one of the
largest producer of diamonds in the world
Data Source: Kimberly Process
Proprietary and Confidential
Page 9
The total value of exports of rough diamonds mined in Botswana in 2013 was P28
billion, representing 45% of all exports from Botswana
Proprietary and Confidential
Page 10
For Debswana our long term plans indicate resources that can be mined
economically up to 2050
 The lives of the Debswana major mines can be extended
beyond the original life of mine estimates up to 2030
 This will strengthen Debswana and Botswana’s position as a
leading producer of rough diamonds in the world
 Diamonds will therefore continue to contribute significantly to
the economy and to the lives of the people of Botswana
Proprietary and Confidential
What opportunities exist for local governments to tap into this
growth and the long term future of mining in Botswana??
Proprietary and Confidential
The success of beneficiation in the diamond sector presents a model for beneficiation
of other minerals in the country
The relocation of the DeBeers Global Sightholder Sales and the establishment of the Diamond Hub have created a
nucleus around which an industry has started to grow to create the all important critical mass
20 diamond cutting and polishing factories, employing over 3000 people
The establishment of the Okavango Diamond Company (ODC) which will distribute up to 15% of Debswana’s total
production by 2016
Around the growth of the diamond sector, emerge opportunities for growth in sectors that offer supporting
infrastructure and services such as banking, security, ICT and insurance
Proprietary and Confidential
The next frontier for growth in the minerals sector is coal, and similar to diamonds,
sustainable growth can be supported by the establishment of a hub with critical mass
 Botswana is sitting on Coal resources estimated at
over 200 billion tonnes, 45 billion at reserves
 Commercial opportunities are limited by the lack of
freight and logistics infrastructure
 The potential will never be realised without
investment in infrastructure and centres like
Francistown can position themselves as a potential hub
for growth in this sector
Proprietary and Confidential
Francistown is the largest commercial centre in the North, and the gateway to the
rest of Africa…
Mining activity around Francistown does not offer a distinctive
advantage to the City of Francistown
Are there opportunities in Francistown’s proximity, connectivity to the
rest of Africa?
Can Francistown become a economic base to supply goods and services
to industries (including mining) in the rest of Sub Saharan Africa?
There is a rich tradition of major mining activity in the region. Is there
potential for mining tourism (linked to other major mining centres;
Orapa and Selebi Phikwe)
Proprietary and Confidential
Proprietary and Confidential