BOTSWANA is expected to pass an amendment to its Mines and Minerals Act enabling citizens to buy a stake in mining projects when the government decides not to exercise its rights.
Bloomberg News said the amendment is being discussed in Botswana’s parliament which is likely to pass it owing to the ruling party’s numerical dominance. Citizens would have the right to buy as much as 24% in projects, according to draft legislation.
The Act currently allows the government to buy as much as 15% in projects. The amendment seeks to encourage, rather than compel, new ventures to invite citizens to purchase a shareholding, said Bloomberg News.
“Where government does not exercise its option of acquiring 15% working interest upon the granting of a mining licence, the holder shall use his best endeavour to dispose the 24% to citizens or citizen-owned companies,” the draft legislation shows.
Botswana, the world’s largest producer of rough diamonds by value, rarely changes its mining legislation and frequently ranks as Africa’s best country for minerals investment. That’s largely because of the nation’s policy predictability in an industry that is the nation’s economic mainstay, making up about a third of budget revenue and the bulk of foreign-currency receipts, said Bloomberg News.
The proposed changes to Botswana’s legislation date as far back as 2016, when the government proposed that the 15% equity entitlement be increased and that in cases where the state opted not to exercise its right, citizens be invited to do so.
Other proposed amendments include requiring mining companies to process their minerals within the country “as far as is economically feasible” and to “the satisfaction of the minister.” Minerals-license holders will also be required to give preference to local citizens and their companies in procurement.
