Monday, December 6, 2021

Botash remains bullish despite subdued commodity prices

Botswana Ash (Botash) Managing Director, Montwedi Mphathi says the future remains bright for the salt and soda ash producer; despite plummeting commodity prices that have resulted in the collapse of some mining operations in the region.

Cliff-diving commodity prices have over the last few months resulted in the collapse of copper/nickel mining outfit Boteti mine (owned by Discovery Metals Limited) while BCL and Tati Nickel mine are on life support and have already sounded a red alert to government seeking a bail out. However, Mphathi last week expressed confidence that the Botash operation will remain profitable going forward, largely driven by the industrialisation of Southern Africa and continued use of salt.

“We have not been as adversely affected by the fall in commodity prices because salt has both consumer and industrial uses,” said Mphathi.

Located in Sua Pan, the Botash operation has become the largest producer of natural sodium products in the region. Botash produces 300 000 tonnes of soda ash per annum and 650 000 tonnes of salt per annum. However, the current salt production at Botash stands at 530 000 tonnes.

“Our current production levels are limited by market demands rather than production constraints,” explained Mphathi.

While Botash’s soda ash business may be affected by market dynamics, the salt operation will remain profitable as demand for the resource increases. For example, Africa alone uses four million tonnes of salt per annum. The requirement for soda ash, which is basically limited to South Africa, peaks at 400 000 tonnes per annum; while Botash produces 300 000 tonnes. Botash’s current lease extends to 2039 and the aquifer lease area covers almost 800 square kilometres. The Botash operation is expected to continue for many years to come as it is estimated that the aquifer is not confined to the Sua Pan area.

“The resource itself is quite vast and we believe operations will continue even after the lease elapses,” said Kangangwani Phatshwane, Botash Operations Manager.

Soda Ash is primarily used in the glass industry to make containers, bottles, jars, car windscreens, windows, textiles, fibre optics and insulation in fibre glass. Botash also sells about 20 percent of its soda ash in the chemical industry and the detergent industry, where it is used to produce soap detergents. On the other hand, salt is used for manufacturing PVC, preserving food products and in other industrial and domestic applications. Botash sells its products in South Africa, Zambia, Zimbabwe, Malawi and the Democratic Republic of Congo (DRC).

Phatshwane further explained that salt extracted from the Botash operation is amongst the purest found anywhere.

“We have no issues with quality because we produce optimal grade salt that is used to make windscreens. Therefore our quality is unquestionable,” he said.

Botash is a 50 percent joint venture between the government of Botswana and Chlor Alkali Holdings (CAH) Group. 

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