Latest News

The Botswana Football Association (BFA) will this afternoon, hold a me...
FRANCISTOWN: A 42-year-old fisherman from Kalakamati village allegedly...
The Botswana Patriotic Front (BPF) has suspended its activities due to...
A rogue buffalo this morning strayed into Maun Bus Rank in the centre ...

Does gov't regret not buying into Karowe?

World famous: Karowe has uncovered some of the world’s biggest diamonds of late PIC: MINING.COM
The Minerals Development Company Botswana, government’s mining investment agency, is investigating whether talks should be started with Lucara into acquiring a stake. Lucara’s Karowe keeps discovering headline-grabbing diamonds, but the decision is anything but clear-cut. Staff Writer MBONGENI MGUNI writes

Since its commissioning in 2012, Lucara’s Karowe Diamond Mine has fast built a reputation for finding some of the world’s most remarkable diamonds. From 2015’s 1,109-carat Lesedi la Rona and 813-carat Constellation, to last year’s 1,758-carat Sewelo and the 549-carat gem announced last week, Karowe has regularly been in the global headlines.

From the beginning of the year-to-date in 2020, Karowe has produced six diamonds greater than 100 carats and appears well on the way to a revenue target of between $180 million and $210 million (between P1.97 billion to P2.3 billion).

Under the Mines and Minerals Act, government is entitled to make offers for equity stakes in mining companies and while it was initially content with royalties and taxes from Karowe, the rising riches appear to have become too tempting to ignore. Last year President Mokgweetsi Masisi revealed that he and other senior officials had held talks with Lucara executives during the Head of State’s trip to the US, where the issue of securing a stake was discussed.

On Tuesday, Mineral Resources, Green Technology and Energy Security minister, Lefoko Moagi told Mmegi the Minerals Development Company Botswana, government’s mining investment agency, was yet to return with recommendations on the idea.

Complicating the matter is that government’s focus at the moment is on its ongoing negotiations with De Beers for a new sales agreement. The current deal is due to lapse next January.

“The time that we are talking about is precarious in the sense that we are still in negotiations with our partner De Beers,” he said in an interview.

“It is not about roughing anything in terms of existing


“All we are saying is that whilst there’s some process that is ongoing now, let that process conclude then we get onto other issues.

“Where we see value we always look at it and see how it will benefit Batswana.”

But does government regret not taking up equity in Lucara? Analysts believe the timing is tricky. Lucara is thinking about going underground by 2026 and should government join its shareholders, it will have to contribute funds for this. Lucara in fact has budgeted $53 million (P581m) for early works towards the underground project, this year alone.

On the other hand, however, Lucara’s share price has gone down in recent times from a peak of P34 per share to the current level of P6.69 on the Botswana Stock Exchange. A lower valuation would be ideal for government to enter the share registry.

For Moagi, the answer to the question about regrets is not a simple yes or no.

“Where we see value we always look at it and see how it will benefit Batswana.

“At Lucara, these are technologies of recovery whereby you use a mega-diamond recovery after the primary crusher. So it’s a question of that stone not being broken before it gets to downstream processes.

“But also it’s a business decision that you take. When you look at Debswana, they are volume driven.

“Lucara is only doing about 300,000 carats tops right now, while Debswana we are talking 20 million.

“It’s also a question of ‘do I go this way or that way’.

“Currently, we enjoy the royalties and taxes coming out of Lucara but it’s something that can be looked at.”





The gobling of Covid 19 Funds

Latest Frontpages

Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper