SA firm divests from Botash
Chakalisa Dube | Monday September 26, 2022 06:00
Owned by the Bud Group, CAH came in as a technical partner for Botash in 2009 after buying shares that De Beers, Anglo American, AECI, and various financial institutions owned. The Government of Botswana has maintained a 50% shareholding in Botash over the years.
In a statement this week, Bud Group executives did not give details on the reason behind the exit but said the move was part of a reorganisation which would also result in divestment from other affiliates and subsidiaries.
“Botash is on an exciting growth path with some very interesting capital projects in the pipeline,” the executive said. “The Bud Group restructure will in no way impact on, or interfere with, the ongoing plans and it will be business as usual for the company.”
The executives said the group had engaged with the Ministry of Minerals and Energy, which has “provided its support to find an appropriate investor to replace Chlor-Alkali Holdings as the private partner in the business”.
Botswana Mine Workers Union (BMWU) president Joseph Tsimako told BusinessWeek that it would be preferable to see the shareholding being taken up by a citizen entity.
“Our wish is to see employees or citizen companies being given priority to purchase the shares once they are disposed of. “As a union, we would also be interested in purchasing the shares subject to the approval of our members,” he said.
Tsimako said the union was not opposed to CAH’s exit.
“We have been engaged thoroughly about the sale of the mine and assurances were given that the sale will not result in job losses,” he said. “On those grounds, we are not opposed to the sale.”
Botash has long been a feather in the cap for government, enjoying strong market share in Africa and stable revenues even in years where other commodities have underperformed. Exports of soda ash and salt rose to P729.1 million in 2020, from P561.1 million in 2019, despite the disruptions to both movement and demand caused by COVID-19. Last year, exports of the two commodities were up to P808.5 million.
Botash’s strength lies in its competitive edge in the region and the lucrative contracts it holds, particularly in South Africa.
Soda ash enjoys resilient demand in industries such as glass production, chemicals, and detergents, while salt has over 14,000 different applications from food to the softening of hard water.