Botswana is considering enacting legislation requiring mining companies to sell a 24% stake in their mines to locals if the government passes the option to acquire the shareholding.
The government of Botswana, the world's second-largest diamond producer by value and volume, is permitted to acquire a 15% stake in any mining project upon obtaining a license under the existing Mines and Minerals Act.
The government can negotiate bigger stakes in diamond mines under the current law.
It has 50% equity in Debswana Diamond Company, 15% in De Beers, and wholly owns the Morupule Coal Mine through the state-owned Minerals Development Company Botswana.
Gaborone opted against obtaining a 15% stake in all recent mining agreements, such as the acquisition of Karowe Diamond Mine by Lucara, the acquisition of Khoemacau Copper Mine by China's MMG, and the recently opened Motheo Copper Mine by Australia's Sandfire.
"Where the government does not exercise its option of acquiring a 15% working interest upon granting a mining licence, the holder shall use his best endeavour to dispose of the 24% stake to citizens or citizen-owned companies," Reuters quoted mines minister Lefoko Moagi as stating in the Mines and Minerals Amendment Bill tabled in parliament.
He previously said that the government was considering making use of the country's pension funds to provide capital for Botswana to acquire the stakes.
Pension funds have been requested to decrease the proportion of funds invested overseas from 65% to 50% over the next three years as a result of a recent legislative amendment.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
