Stanbic Bank ideal partner for Mining and Metals sector growth
Staff Writer | Tuesday August 23, 2016 15:17
A statement from the bank read in part: “These are the sentiments reiterated by the bank at a recent engagement of Mining and Metals sector conference held last Thursday at Masa Square Hotel in Gaborone”. It further stated that the bank’s expertise, experience and insight in financial solutions for the Mining and Metals sector stem from recognising the integral role of the sector to the development of African countries and their sustainable infiltration into international markets.
The bank said that the Mining and Metals sector remains the primary source of both government income and foreign exchange for Botswana and has been the single largest contributor to Botswana’s GDP for over 47 years, since the establishment of a Public Private Partnership between the Botswana and De Beers. “Despite weaker global economic growth, we have seen a sustained level of demand for extractive minerals such as diamonds, signalling a need for continued support and financing of operations in this space. Stanbic Bank continues to lead the charge here, and has developed indepth mining sector expertise to support players within the industry. This is further supported by leveraging off the full capabilities of our parent, Standard Bank Group, who wields considerable experience in the sector across the African continent. We have extensive experience in providing innovative solutions to the industry in the form of advisory, debt, capital markets, transactional products and services, to mention a few,” said Stanbic Bank Botswana Head of Corporate and Investment Banking, Sheperd Aisam.
Additionally amongst the key points of conversation during the engagement were trends, both local and global, within the sector. Research indicates low commodity prices overshadowing the industry in recent years. Prices of most commodities such as gold, oil, copper, silver, iron ore, and coal have reached all-time lows. This has been attributed to weak market fundamentals, amongst them: weak global demand, credit restrictions in China, oversupply from new low-cost mining projects and a stronger US dollar.
“Botswana’s diamond industry has also experienced the same downfall, as a record of dismal performance in diamond sales during the year 2015, with pressure mounting from overstocking in the midstream and a slowdown in consumer demand. This affected export earnings and government revenues considerably.
Although the demand of diamond sales significantly improved in 2016, the industry remains cautiously optimistic. Uncertainties surrounding key market fundamentals, such as consumer demand and liquidity concerns in the midstream continue to cloud the industry,” said the Mining and Metals client coverage manager, Rebone Diloro.