Economist Warns: De Beers’ Departure Threatens Botswana’s Economy
Economist and leader of the Alliance for Progressives (AP), Ndaba Gaolathe, has said that the talk of Botswana walking away from De Beers, if it were to happen, would put the Debswana mega expansion projects in jeopardy, thereby putting the economy of Botswana at risk of collapse.
Gaolathe, who made a public statement last week, said that if Botswana were to part ways with its long-term partner without a plan in place, it would be a blunder of great proportions.
“The profitability of mines is diminishing because mines are getting deeper. To continue mining, investment in projects is necessary.
The current project, Cut 9, at Jwaneng Mine, has seen an investment of $2 billion (almost P30 billion). De Beers has already paid half of it, and this project will only come on stream in 2027.
“The second project is the underground project, which will require $6 billion (over P80 billion) and will come on stream in 2030. Where will we be able to get the P80 billion? If we go alone, we need to have a plan. I am not saying we cannot do that. On the mining side, it can be done, but I will not recommend we do it now,” said Gaolathe.
Botswana is currently embroiled in negotiations with De Beers over a sales agreement and a mining license for Debswana operations.
These negotiations, for the first time in history, have seen the Government of Botswana taking a confrontational stand against De Beers and even threatening to walk away from the partnership if the government’s desires are not met.
