Last Updated
Wednesday 26 November 2014, 17:03 pm.
Mining powers foreign investment to P26bn

*De Beers extends lead on investment in local mining
By Staff Writer Fri 28 Nov 2014, 04:44 am (GMT +2)
Mmegi Online :: Mining powers foreign investment to P26bn








According to a recently published International Monetary Fund (IMF) survey on direct investment, Luxemburg, where De Beers' holding company is based, accounted for the lion's share of foreign investment in Botswana.

The Coordinated Direct Investment Survey, the latest authoritative indicator for Botswana's foreign investment position, indicates that Luxembourg accounted for 70 percent of total foreign holdings in the local economy in 2011.

According to the survey, Luxembourg's investment position in Botswana rose from US$405 million (P3.2 billion) in 2010 to US$2.3 billion (P18.1 billion) in 2011.

The data also indicates that of the P18.1 billion held by Luxembourg-based investors, US$1.6 billion (P12.6 billion) was in the form of equity, with the balance classified as debt.

The IMF data supports De Beers' ramp up of activities at the mammoth Cut 8 project where it is ultimately expected that US$3 billion (P23.7 billion) will be spent over a 15-year period.

The Cut 8 project, designed to deepen and widen the Jwaneng Mine pit by removing 700-million tonnes of waste, has been hailed as the country's single biggest infrastructural investment.

Other figures from the survey indicate that after Luxembourg, South Africa, Australia, the United Kingdom and Mauritius had the highest foreign investment positions in Botswana for 2011. According to the IMF, South Africa's holdings in Botswana jumped nearly 60 percent in 2011 to US$519 million (P4 billion), while Australia's investments dropped by about 10 percent to US$187 million (P1.5 billion).

South African investments in Botswana cut across the economy, from manufacturing, retail, wholesale to mining, engineering and the service sectors. 

Australian interests, on the other hand, are strongly in minerals, where several junior miners have been ramping up activities aimed at commercial production. Of the Australian miners investing in Botswana, the most advanced is Discovery Metals Limited whose Boseto Copper Project is now in production. The United Kingdom's investment position in Botswana dropped 71 percent to US$77 million (P607million) in 2011, while Mauritius' holdings fell 61 percent to US$50 million (P395 million).

 Conversely, the IMF's survey indicates that Botswana's resident businesses reduced their offshore investments in 2011, the figure declining 58 percent to US$240 million (P1.9 billion). On a country-by-country basis, local businesses were most heavily invested in South Africa, United Kingdom, United States, Switzerland and China.

For 2011, Botswana businesses investment holdings in South Africa dropped 53 percent to US$144 million (P1.1 billion), while United Kingdom investments dropped 76 percent to US$31 million (P245 million).

Of the top five territories hosting local investments, only Switzerland and China notched increases in the amount of assets held by Botswana businesses, albeit from positions of nought in 2010.



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