Botswana’s Mining Industry Hit by Production Slump

Botswana’s once-booming mining industry is grappling with significant production slowdowns, according to a recent report by state-run Statistics Botswana. The Diamond Index, a key indicator of the sector’s health, fell 1.8% year-on-year in the third quarter of 2019, painting a concerning picture.

While diamond production dipped slightly, the report attributes this to a strategic shift towards aligning output with market conditions, rather than a sign of underlying weakness. However, the quarter-on-quarter analysis reveals a worrying trend, with a 0.7% decrease compared to the second quarter, albeit an improvement over the steeper 4.2% decline witnessed earlier in the year.

Gold production mirrored the downward trajectory, contracting by 1% year-on-year. This was further compounded by a 2.9% quarter-on-quarter fall, stemming from lower gold recoveries.

The soda ash industry faced a substantial 20.5% year-on-year decline, primarily due to operational inefficiencies that hampered full capacity utilization. However, a 49.2% quarter-on-quarter surge suggests stockpiling efforts to mitigate potential supply shortfalls during maintenance shutdowns.

Salt production also felt the pinch, contracting by 17.2% year-on-year, followed by a marginal 0.2% dip compared to the previous quarter.

The coal sector witnessed the most significant year-on-year plunge, with production nosediving by 28.6%. This slump is largely attributed to reduced uptake by the Morupule B Power Station, currently undergoing boiler repairs. Reassuringly, stockpiling efforts ensured no supply constraints materialized. The quarter-on-quarter picture mirrored the yearly trend, with a 23.5% decrease.

Perhaps the most alarming development is the complete halt in production of copper-nickel-cobalt matte, copper concentrates, and silver. This stark reality reflects the devastating impact of volatile commodity prices, forcing associated mines into provisional liquidation as sustained operations became untenable.

Botswana’s mining industry, a cornerstone of the national economy, finds itself at a crossroads. Strategic adjustments, operational efficiencies, and navigating the choppy waters of global commodity markets will be paramount in ensuring its return to robust health.