Botswana’s Mines and Minerals Act may undergo significant amendments, slated for debate by lawmakers this Wednesday. With the Botswana Democratic Party holding a dominant position in parliament, government-backed bills typically pass with minimal modifications.
Currently, the government can acquire up to 15% equity in any new mining venture. The proposed amendment encourages, rather than mandates, new mining projects to offer shares to citizens if the government chooses not to take its full 15% share. According to the draft legislation, if the government declines its 15% option upon the granting of a mining license, the license holder must make efforts to sell 24% of the venture to citizens or citizen-owned entities.
Botswana, renowned as the world’s largest producer of rough diamonds by value, seldom alters its mining laws and consistently ranks as Africa’s premier destination for mineral investments. This reputation stems from its stable policies in an industry that contributes significantly to its budget and foreign currency earnings.
Globally, there is a growing trend of resource nationalism as developing nations seek a greater share of profits from their natural resources to address historical wealth disparities arising from mining activities. In Botswana, citizens have increasingly called for direct access to equity in the mining sector.
The proposed amendments trace back to 2016, when the government first proposed increasing its equity stake and encouraging citizen investment in cases where the government opts out. Other proposed changes include mandating that mining companies process minerals domestically “to the extent economically feasible” and to the “satisfaction of the minister.” License holders would also need to prioritize local citizens and businesses in procurement.
Despite rarely exercising its 15% equity option, the government holds substantial stakes in key entities such as diamond producer De Beers, Morupule Coal Mine, and Botswana Ash Ltd., a producer of salt and soda ash.
