Botswana’s Prosperity Diamonds: Minerals and Energy Exports and Revenue Projections

Abstract

This report is on the basis of studies by Fichani and Freeman undertaken in 2012 entitled ‘Minerals and Energy Exports and Revenue Projections’ that looked at the prospects of the development of the known new mines in Botswana. This includes coal, Coal Bed Methane (CBM), uranium base metals including iron ore, copper and nickel. Significantly, the study concludes that even if all these new mines are developed it is unlikely to compensate for the losses that were expected as a result of the decline in revenues from the diamond sector. This means that, on their own and without further beneficiation, the new sectors are unable to act as either a revenue or export replacement of the important revenues from diamonds which make up some one third of government revenue on an annual basis. This report was predicated on a resource estimate for diamonds which has now been replaced in late 2014 and it would now appear that diamond production will not decline significantly from current levels before 2050. While this new assessment is highly fortuitous for Botswana it means that the dates of diamond decline have been delayed for what is effectively a whole generation.

Keywords: Botswana, Diamonds, Energy exports, Mineral revenues