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Botswana’s mining production declines by 8.7% in Q2 2019

Mining production in Botswana decreased by 8.7 per cent in the second quarter of 2019, compared to the second quarter of 2018, the latest statistics released by the Statistics Botswana reveal.

Announcing the latest production figures, Statistician-General, Dr Burton Mguni said the main contributor to this reduction in the index were diamonds, which contributed a negative 8.1 per cent. Other minerals that saw a drop in production under the period under review were; gold and coal while soda ash and salt recorded some significant increases. “The Index of Mining Production stood at 85.9 during the second quarter of 2019, showing a year-on-year reduction of 8.7 per cent from 94.0 recorded during the second quarter of 2018,” Dr Mguni said.

He added; “Comparison on a quarter-on-quarter basis shows a decrease of 4.1 per cent, from the index of 89.6 realised during the first quarter of 2019 to 85.9 registered during the second quarter of 2019.” Mining production in Botswana averaged 9.48 per cent from 2004 until 2019, reaching an all-time high of 624.40 per cent in the first quarter of 2010 and a record low of -91.60 per cent in the first quarter of 2009

The quarter-on-quarter analysis showed a decrease of 4.1 per cent, from the index of 89.6 per cent during the first quarter of 2019 to 85.9 per cent observed during the second quarter of this year. Dr Mguni said diamond production decreased during the period under review, declining by 8.4 per cent during the second quarter of 2019, as compared to an increase of 6.4 per cent registered in the same quarter of the previous year.

“This can be attributable to weaker trading conditions as well as being cautious to macroeconomic uncertainty. The quarter-on-quarter analysis reflects that diamond production decreased by 4.2 per cent during the second quarter of 2019 as compared to a decrease of 5.4 per cent registered in the first quarter of 2019,” he said. Gold production declined for the second consecutive year, decreasing by 14.0 per cent during the second quarter of 2019 compared to the same quarter in 2018.

According to Dr Mguni, the decrease in gold production was as a result of unstable commodity prices as well as the notable deteriorating lifespan of the Mupane Gold Mine. “On the other hand, the quarter-on-quarter analysis shows an increase of 36.6 per cent during the second quarter of 2019 compared to the first quarter of 2019,” he said.

Meanwhile, positive production increases were recorded in soda ash, recorded positive growth for the sixth consecutive quarter, increasing by 0.1 per cent during the second quarter of 2019, compared to the same quarter of the previous year.

“The continued improvement in production may be attributable to the plant’s high efficiency following the plant refurbishment which occurred in 2017. On the other hand, the quarter-on-quarter analysis shows that production declined by 30.7 per cent during the period under review,” the Statistician-General said.

Botswana Ash (BotAsh), the only extractor of Soda Ash, is a 50/50 partnership between the Government and Chlor Alkali Holdings (CAH) Group, a South African based company, which is also the managing partner. BotAsh has a capacity of 300, 000 tons of soda ash per annum and currently produces over 280.000 tons, making Botswana one of the largest producers in the world.

Salt production also recorded an increase of 41.7 per cent during the second quarter of 2019 compared to the same quarter in 2018. The quarter-on-quarter comparison, on the other hand, shows a decline of 25.0 per cent during the second quarter of 2019 compared to a decline of 21.9 per cent of the preceding quarter.

However, coal production dropped for the third consecutive quarter, declining by 6.3 per cent during the second quarter of 2019 compared to production registered during the same quarter of the previous year. Although production fell, it is important to note that there was no shortfall in the supply of coal due to stockpiling. The quarter-on-quarter comparison, on the other hand, shows that coal production rose by 12.3 per cent when compared to the preceding quarter.

“Copper-nickel-cobalt matte, copper in concentrates and silver recorded zero production during the period under review. The instability and uncertainty of commodity prices affected the operations of the involved mines, which made it difficult to sustain themselves at the current prices, leading to the provisional liquidation,” said Dr Mguni. The mining industry in Botswana has since the early 1980s been the largest contributor to real Gross Domestic Product (GDP), contributing between 20 and 50 per cent.

These mineral contributions have enabled the Government to undertake investments in both human and physical infrastructure development over time. Even though the mining sector’s contribution to GDP has been below 25 per cent since the 2009 recession, available data indicates that the sector still leads in terms of value-added contribution to GDP.

Dr Mguni said despite its great contribution to Botswana’s GDP, the mining industry was capital intensive and accounted for less than five per cent of employment in the private sector. “With such a significant contribution to the GDP and the national economy, the need for a measure of the change in the production of minerals in Botswana cannot be overemphasised. The index of the physical volume of mining production is such a measure that provides a relative change over time in mining production,” he said.

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