Last Updated
Monday 01 June 2015, 18:03 pm.
Property booms amidst Activox suspension

It is well documented that the Russians have suspended the Activox Refinery project, leading to hundreds of job losses. But as Staff Writer WANETSHA MOSINYI observed recently on a trip to Francistown, it is not all doom and gloom, especially in the property sector
By Staff Writer Tue 02 Jun 2015, 19:25 pm (GMT +2)
Mmegi Online :: Property booms amidst Activox suspension








It was announced last May that the Activox Refinery project being built near Francistown by Tati Nickel, a subsidiary of Russia's Norilsk Nickel, was to be postponed indefinitely.
Francistown, which has been experiencing an economic boom as a result of unprecedented mining activity around the city and in northern Botswana, has been left uncertain about the future.

Hundreds have lost their jobs, prompting unions to remonstrate. They even lodged an unsuccessful case with the Industrial Court.

However, contrary to some reports, the Tati Nickel Mine itself is not threatened. It will keep producing concentrates, which are smelted into copper-nickel matte at BCL Mine in Selebi-Phikwe.

There are still good prospects for the expansion of the open pit operations at Phoenix Mine, as well as for the re-opening of the nearby Selkirk underground mine.

On this basis, Francistown's property market boom should continue. Property experts who spoke to Business Week say they do not foresee a recession due to the suspension of the Activox project.

The Property Manager at the Francistown branch of Willy Kathurima Associates, Elijah Gwamulumba, says demand for property in Francistown remains robust and that it flows largely from Tati Nickel Mines ,which are forecast to operate until 2019. There is also gold mining at Mupane Mine, which was recently given a lifeline by its parent company Iamgold, increasing its lifespan to 2013. And though African Copper's Mowana Mine is located near Dukwi, its construction operations were based in Francistown where its main office is still located. Gwamulumba says the vast majority of the Activox job losses affected employees of sub-contractors who were based and housed at the project site, and should not affect the residential property market in Francistown. But he does admit that the suspension of the Activox project is regrettable because once completed, it was going to attract professionals to work at the refinery who will need executive residential accommodation in Francistown. The one property-related project that came to a halt is the proposed Francistown Golf Estate because one of its main drivers is Tati Nickel. When Tati Nickel was still owned by LionOre, it committed to building some units for its executives at the estate. But since Norilsk took over, the project has seen very little progress, though one of managers close to the project says the project is still on. The man who wants to remain anonymous says the fact that developers, Time Projects, recently acquired Tati Company's three properties at P75 million is a sign of confidence the company has in the future of Francistown. Growth in government spending and numerous initiatives being introduced by the new administration of President Ian Khama are other factors that economists believe should boost economic growth in centres like Francistown.

Meanwhile, Norilsk's decision to put its Activox project on ice - which was to be a world first - appears justified.  Rising costs of construction, equipment and project management halted several projects around the world. For Norilsk's Activox, capital costs jumped from an initial estimation of P4 billion to P10 billion last May. Regional power shortages, which are projected to continue for the next four years in Botswana, were also a crucial consideration in the decision to postpone the project. What this means is that Tati Nickel could not be sure of receiving the required power to commission the project on time. Falling nickel prices - down to $22 000 a ton at the end of May 2008 from a peak of $54 000 a year earlier - also contributed to the demise of the project.
But parallel to these hard facts, skeptics are suggesting that Norilsk suspended the project because it wants to move this breakthrough technology to Russia. They say to ensure their sustainability, government should acquire equal shareholding in such ambitious projects so as to have greater leverage to negotiate for better deals as well as to imbue them with a sense of confidence.



Exchange Rates
FOREIGN EXCHANGE: Tuesday, 02 Jun 2015
FOREIGN / PULA
PULA / FOREIGN
1 USD = Pula   9.9602
1 GBP = Pula   15.1745
1 EUR = Pula   10.9051
1 YEN = Pula   0.0799
1 ZAR = Pula   0.8145
1 Pula = USD   0.1004
1 Pula = GBP   0.0659
1 Pula = EUR   0.0917
1 Pula = YEN   12.51
1 Pula = ZAR   1.2278
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