Botswana proposes for new mining law
Botswana is proposing for a new amendment to its Mines and Minerals Act. The new legislation allows locals to purchase a 24% stake from mining companies, as outlined in a draft bill that will amend the current Mines and Minerals Act.
This new mandate will apply if the government decides not to exercise its existing right to acquire a 15% shareholding in mining projects upon licensing. The proposed changes aim to increase local participation in the mining sector, particularly if the government opts out of its acquisition rights.
Mines and Minerals Act
Under the current Mines and Minerals Act, the Botswana government can acquire a 15% interest in mining projects when they are licensed, with the option to negotiate for higher stakes, especially in diamond mines. However, recent transactions, including those involving Lucara’s Karowe diamond mine, MMG’s Khoemacau copper mine, and Sandfire’s Motheo copper mine, have seen the government choose not to exercise this option.
Lefoko Moagi, Botswana’s Minister of Mineral Resources, Green Technology and Energy Security, has suggested that local pension funds could finance the acquisition of these stakes by Botswana citizens. The Mines and Minerals Amendment Bill, which Moagi is set to present to parliament, includes a clause that reads: “Where government does not exercise its option of acquiring a 15% working interest upon granting of a mining licence, the holder shall use his best endeavour to dispose the 24% stake to citizens or citizen-owned companies.”
The government, through the state-owned Minerals Development Company Botswana, already holds significant interests in major mining ventures, including a 15% stake in De Beers, a 50% stake in the Debswana Diamond Company, full ownership of Morupule Coal Mine, and an indirect stake in coal miner Minergy through convertible debt. In addition, in May 2024, Si6 Metals secured a prospecting licence (123/2024) from the Botswana Department of Mines, which is valid for up to seven years.
This legislative proposal underscores Botswana’s commitment to enhancing local ownership and participation in its lucrative mining sector, fostering a greater share of the economic benefits for its citizens.
