Botswana used to be one of the poorest countries in the world, and now is a flourishing, growing middle-income economy, all off the back of mining. To profit from mining is, in part, reliant on the good fortune of existing on resource-rich land, but it takes so much more strategy and governance than this. We spoke with Charles Siwawa, CEO of the Botswana Chamber of Mines about how the organisation has helped to further Botswana’s interests, both by supporting the mining industry and, through doing so, the country as a whole.
Botswana enjoys three main sources of mining income: base metals, coal and, most iconically, diamonds. The Botswana Chamber of Mines was established in 1984, existing to work as a go-between that assists mining and exploration companies in the country by speaking with them and the parties that may impact them, such as the government, NGOs, United Nations bodies and other environmental groups. It does all of this to promote the interests of the country’s mining industry, but with a wider view, the interests of the country as a wider economy.
Charles describes the Chamber as a “united voice” for the various companies that work in mining and related services within Botswana. These companies can register as members of the Chamber, and can therefore benefit from their concerns and points of view being heard and represented by the Chamber’s advocacy. We asked Charles about some of the ways that the Chamber has been able to bring about a positive change for the companies and industries it represents. As well as going back and forth in discussion with the Botswana government, the Chamber takes a more hands-on approach:
“We get involved in the drafting of policies and acts that the government wants to implement. Primarily, we do that knowing that the government might draft these policies and acts without necessarily looking at the pragmatism of implementing them.” Politicians do not know the ins and outs of mining and exploration, which is where the Chamber steps up to represent these needs. “If you engage the private sector with the government, in terms of drafting those politics, they become much more implementable. We’ve engaged ourselves in all of these things, including the setting of standards, so there is quite a bit that we think we have achieved.”
The Chamber also lobbies and pushes to have laws or systems amended when they are not allowing the industry to operate efficiently. This not only helps local mining and exploration groups, but makes Botswana a more attractive country to foreign companies and investors. Having the resources is only half the battle; working conditions must also be feasible, and whilst mining and exploration companies are hardy when it comes to terrain and other such challenges, there is nothing they can do about bureaucracy. The Chamber is a different story.
“There were certain areas where we felt that the government was not efficient enough at delivering their services, and we engaged with them to the point that we’ve seen things getting easier and easier, especially when it comes to permits. It used to be very difficult to get a work permit, in the sense that it took a long time. By the time your permit was approved, the person you wanted to employ may have moved on to other opportunities. Nowadays, provided that all the paperwork is right, your permit should be approved within a fortnight.”
The Chamber has also reduced the time it takes the government to convert a prospecting license into a mining license, again to make work in the country smoother and more appealing to outside companies. “People would like to work in an environment where there are few hindrances to what they want to do.” As mining has been the backbone of Botswana’s economy for some fifty years, it only makes sense that the country strives to be as mining-friendly as possible.
Although the Chamber of Mines was established in 1984, it did not operate out of a set office until 2010. It was Charles who founded this Secretariat. Prior to this, he worked in the mining industry himself, in particular the diamond industry, which has given him the insight into its ins and outs that he needs to understand the concerns that the Chamber’s members bring to him. One such member is Botswana Ash Ltd (Botash), a founding member of the Botswana Chamber of Mines. “They have remained steadfast in their membership over the years and contributed significantly to the growth of the Chamber.” As a member of the Chamber, Botash has a number of services available to it, including advocacy services, help with permits and, in particular, assistance in vocational skills development, which has been at the forefront of Botash’s strategy and that has, according to Charles, “proven over the years to be of added value to the industry as a whole.” Charles described the relationship between the two entities as conducive to the growth of both organisations.
These close industrial bonds and this strong industry did not always exist in Botswana; 50 years ago, the country’s economy was extremely different. The transformation began with mining, but thanks to careful governance and forward thinking, this industry is not where the benefits have ended:
“50 years ago, we were sitting at the bottom four of the poorest countries in the world. We’ve worked ourselves up to being a middle-income country, and our aim is to climb higher in this bracket. What really drove us is the diamonds – at one point, in fact, about ten years ago, we were the biggest diamond producing country in the world.” The revenue of this business would not, in itself, guarantee economic strength for Botswana, but the government, in collaboration with the Chamber, have been wise in how they have put this revenue stream to use. “The diamond revenue was used to diversify the economy. You need to use it for the diversification of other industries; when other industries are also operating, then you have a balanced economy. Some 20 years ago, diamonds contributed around 50% of Botswana’s GDP; now, we’ve managed to square that down to about 20%. That isn’t because there’s less money contributed by the mining industry – it is because these other industries have come up.”
Another, more direct way that the Chamber wants to see mining boost other industries is by creating work. With so much money and so many resources involved, mining is a vast potential market for the rest of Botswana to take advantage of. “We want to embark on citizen participation within the mining industry, and to use the mining industry as a market. For instance, bottled water – if you are bottling water in Botswana, the mining industry should be able to absorb the output from your plant.” This could go far further than simple products like water; mining needs equipment, and Charles would like to see this equipment produced locally, and has pledged to support the company that tries.
There are three levels to encouraging this sort of business involvement, which Charles laid out for us in order of the Chamber’s preference: “The first level is that we encourage citizen participation. If there’s a citizen company, that will get first priority. On the second level, you get a joint venture, with a company from outside the country and one from within partnering up.” These are the majority of what Charles has seen occurring. Finally, the last category is one without local involvement, where a product is currently not produced to standard within Botswana. Charles hopes to see local participation in these areas eventually.
Botswana’s mining industry took a hit a few years back, due largely to commodity prices, and this saw a significant decrease in the number of mines in the country. However, prices are going back up, and the industry is back on the rise. Charles feels that the future is bright for the industry and, in particular, that base metals are set to see great improvements. Coal and diamonds are steady, established industries, but recent changes in the country are about to significantly boost its base metals potential.
Base metal mines and deposits are mostly found on the western side of Botswana, but this side of the country has a less developed infrastructure. In particular, it was lacking in electricity. “The government is now putting in place grid power from the eastern part of the country to the west, primarily to support these mines. We should see, by next year and beyond, quite a few of those mines opening up.”
This new power grid will not only assist the mines in the area, but also any community that it passes that previously did not have power, which leads on neatly to the Chamber’s other goal. As well as striving to support Botswana through its industry, it also believes in helping the country through outreach, and encourages all of its members to be ethical in their mining approach, both in terms of environmental practices and through involvement with local communities. “Our members are not coerced to be environmentally friendly – it comes naturally to them to adopt the principles of good governance in terms of environmental issues. Secondly, if you look at Corporate Social Investment, even some of our companies who are not generating any revenue, such as exploration companies, still find it fit to reserve some of their capital for corporate social investment. It is very important to us. By participating in this, you are buying a social licence to operate.”
Charles shared several stories with us of corporate social involvement from his Chamber’s members, including the story of an exploration company who found a village with a broken down well, with its water reticulation also in a bad way. The company restored both. He also shared stories of companies who have supported schools by building classrooms, or assisted communities by helping to revitalise their farming.
From these individual cases to a wide-spread economic effect, mining has been and continues to be an essential part of the building blocks of Botswana. As long as the industry operates, the Chamber will be present to protect it, and to uplift the country as a whole.