The Botswana government is proposing a new law that would mandate mining companies to sell a 24% stake in their operations to local citizens or companies, a significant departure from current regulations.
The proposed Mines and Minerals Amendment Bill, set to be presented to parliament by Mines Minister Lefoko Moagi, aims to increase local ownership in the country’s lucrative mining industry.
Currently, the government has the option to acquire a 15% share in any mining project upon granting a license.
However, this right has not been exercised in recent major mining deals, including the Karowe Diamond Mine, Khoemacau Copper Mine, and Motheo Copper Mine.
The new legislation seeks to address this by imposing a mandatory 24% stake for locals unless the government chooses to exercise its existing 15% ownership option.
To facilitate local ownership, the government is considering utilizing pension funds as a source of financing for Batswana to acquire the required shares.
A recent amendment to pension fund regulations has already reduced offshore investments from 65% to 50%, potentially freeing up funds for domestic investments.
Botswana, renowned as the world’s top diamond producer by value and an emerging copper mining hub, is keen to maximize the benefits of its mineral wealth for its citizens.
By increasing local ownership, the government aims to stimulate economic growth, create jobs, and enhance the country’s overall development.
The proposed legislation is expected to spark debate among stakeholders, including mining companies and local investors.
The government will likely face challenges in implementing the new law effectively, particularly in ensuring fair valuation of the 24% stake and the capacity of local investors to participate meaningfully in the mining sector.
