Thursday, October 28, 2021

BOTASH advances towards diversification of products to stay afloat

Botswana Ash (BOTASH) (Pty) (Ltd) Acting Managing Director, Kangangwani Phatshwane says that the mine is currently at an advanced stage to diversify its products and increase returns.

Among the achievements that the company counts is the re-commission of the liquid cabon dioxide plant. Liquid carbon-oxide is a product from Soda Ash which is used for refrigeration and cooling process.  It is also used as an inert gas in chemical processes, in the storage of carbon powder and in fire extinguishers.
BOTASH, which is the largest producer of natural sodium products in the region, produces 300 000 tonnes of soda ash and 650 000 tonnes of salt tonnes per annum. Salt contributes to 20 percent of the mine’s revenue while Soda ash contributes 80 percent.
Located in Sua Pan in the northern part of the country, BOTASH is owned by the government of Botswana and Chlor Alkali Holdings (CAH) Group, a South African company, at 50 percent shareholding each.
Phatshwane also added that plans to manufacture bicarbonate of soda as part of their diversification drive are also at feasibility study and potash is at process selection. Bircabonate of Soda can be among others used as an ingredient for baking while potash is used as fertilizer. He also said as a way of maximizing returns, BOTASH has commissioned another pilot project plant which seeks to package salt into smaller packages to attract a higher price. The mine has often packaged its salt in 50 kg bags.
“The pilot project has been commissioned. While off take was initially slow it is currently about 100 tons per month,” he said.
He said that last year (2017) was an extremely challenging year for the mine due to heavy rainfalls which adversely impacted on production. He explained that the heavy rainfall affected their ability to produce sufficient product to supply both the salt and soda as markets and their returns were affected significantly. He said they had to augment supply by importing soda ash from other producers overseas.
“Our margins dropped by more than 10 percent largely arising from high costs of imported soda ash. However, Botash recorded a profit after tax in 2017, although there was a significant drop of over 50 percent on EBITDA,” he added.
BOTASH currently exports its products to South Africa, Zambia, Zimbabwe, Malawi, and Democratic Republic of Congo (DRC). South Africa which is the largest importer of its products gets 90 percent and 50 percent of soda ash and salt respectively while the other countries get the rest of the percentages.
Among some of the important issues, the Acting Managing Director said BOTASH has been desirous of exiting a tax agreement with government. The agreement according to Phatshwane entailed delayed recognition of tax obligations until when distributions or dividends to shareholders were due.
“The exiting finally happened on the 1st of July 2017 allowing BOTASH to operate within the regular tax regimes. There is a further split for tax purposes into mining and manufacturing to ensure that each activity is better aligned to the approximate tax regime. This should be efficient for both the tax receiver and the business,” he said.
According to Phatshwane the mine currently employs around 455 direct employees with another 200 odd employed but contractors. In terms of localization he said the mine has 98 percent local staff and 2 percent expatriates. He however said that the mine continues to experience shortage of skilled workforce. He said there is a shortage in general of the right depth of technical skills needed for their unique operations.
“Even artisanal skills like riggers and coded welders are difficult to come by,” he explained.
He also said that BOTASH continues to experience transportation costs for its products to South Africa which is one of their challenges. He however said they are committed to working with other stakeholders to make bulk freight more efficient in their corridor. The mine transports its product to South Africa through rail transport.
Phatshwane also said the mine is on a good course towards diversification of the economy of Sowa Town, through tourism as it is entrenched in Makgadikgadi Pans. He said some of their milestone achievement was the construction of a game park which holds a few rhinos in addition to other species.
“We have also completed another phase of the upgrade of the Makgadikgadi Lodge. We will be hosting Makgadikgadi epic, one of the flagship events of the Botswana Tourism Organization in July 2018,” he said.

RELATED STORIES

Read this week's paper