Canada’s Premium Nickel Resources buys huge liquidated state mine in Botswana
Canadian company Premium Nickel Resources (PNR) has bought Botswana’s abandoned state-owned copper mine known as BCL to resume operations in three years, the Minister of Minerals, Green Technologies and Energy Resources said on Tuesday. , Lefoko Moagi. PNR obtained the exclusive rights in February for a six-month screening of the BCL, which went into liquidation in 2016.
The company signed contracts to buy two of the three wells and related infrastructure, he said, without specifying the value. Moagi added that PNR was negotiating a separate deal to buy another mine from BCL Group, the Tati nickel mine. In February, BCL liquidator Trevor Glaum said PNR would begin construction of the mining infrastructure and prepare to operate it, subject to a feasibility study, with an estimated cost of over $ 400 million. of dollars.
The mine produced an average of 40,000 tonnes of copper and nickel at peak times per year, but high operating costs and low international raw material prices led to its liquidation in 2016.
What the sale may reflect is an opportune time for a Canadian miner to take advantage of high commodity prices and a special focus on copper and nickel in the modern green economy.
Five years ago, Botswana was unable to maximize the economic potential of the mine. However, the time has come for these projects which can be put into production quickly. With new projects scarce and price dynamics threatening with insufficient supply, these are the types of deals we may see more frequently in the future.
The fact that the project is located in Botswana raises some questions about the viability of the project and its operations. Mining in the country has suffered somewhat more recently, and complications still remain.
Without a doubt, Botswana is one of the most prosperous developing countries in the world. COVID-19 aside, the country is on track for steady growth.
Botswana is located in central southern Africa, between South Africa, Namibia, Zambia and Zimbabwe. Once considered a backwater with no natural resources, Botswana has long been ignored by the British Empire.
After being one of the poorest countries in the world when it gained independence in 1966, Botswana has become one of the most prosperous developing countries in the world. Significant mineral and diamond wealth, good governance, prudent economic management, and a small population of over two million have made Botswana a middle-income country with a transformation plan to become a high-income country. ‘by 2036.
Botswana is a high middle income country often touted as one of Africa’s few success stories. But despite rising profits from the country’s multinational diamond mining, the country’s Bushman communities continue to suffer. The government is also grappling with a steady influx of Zimbabweans fleeing their country’s economic crisis.
Mining has made Botswana one of the richest countries in Africa. Despite this enormous wealth, Botswana remains a very unequal country. It ranks as the most unequal country in the world on various measures of inequality, such as the Gini index.
From diamonds to copper, nickel and more
Botswana is also known as one of the world’s largest sources of ethical diamonds, making the country’s diamonds popular with consumers who care about where their diamond is produced.
Mining contributes 34% of the country’s gross domestic product (GDP) and 50% of its taxes. Since diamonds were discovered in South Africa in 1967, mining revenues have been invested in infrastructure, schools and medical centers. The industry is also seen as a beneficiary of minerals, creating jobs and boosting the country’s economy.
Today, only about 20 percent of Botswana’s 2 million people are engaged in diamond mining. But the country is looking to diversify its economy, betting that sustainable tourism will help maintain high standards of living in the future. And mining projects continue to hold tremendous value in copper and nickel, like the one purchased by Premium Nickel Resources
Although Botswana has long been known for low inflation and controlled wage growth, a 2013 study by the Botswana Institute for Development Policy Analysis, a non-government think tank, on export diversification found that the mainstream -Non-mining work in the local private sector is more expensive. than the regional average. For example, diamond processors claim that the cost per stone in Botswana is $ 60-65, compared to $ 20-30 in China and $ 12-25 in India.
While a recovery with a favorable outlook for the global diamond industry is expected in 2021, the economic impact of COVID-19 is expected to be deeper and more lasting. Developments in the diamond industry will have a telling effect on the recovery in the near term, given Botswana’s dependence on this raw material.
Mineral exploration in diamond-dependent Botswana will continue despite the difficult economic conditions facing the country’s mining industry, which will have a negative impact on its economic health, said Charles Siwawa, CEO of the United Nations. Mines and Exploration of Botswana (Chamber of Mines). The minerals he describes are coal, copper, silver, lead, zinc, manganese, and iron ore, which remain attractive due to the amount of ore discovered, as well as economically viable minerals. He points out that financial analysts have assured the House that Botswana’s mines have net mineral values and can make positive contributions to the economy.