Friday, June 21, 2024

Botswana served with P90 billion demand over Okavango mining license u-turn

Botswana’s decision to renege on an earlier agreement for mining prospecting license within the Okavango Delta buffer zone could come at a huge cost to the taxpayer following the mining company’s demand for P93 billion (US$ 7 billion) compensation.

Mining company Gcwihaba Resources (PTY) Ltd are currently locked in a court case with the government of Botswana over the renewal of an iron ore prospecting license in and outside the Okavango Delta buffer zone.

The company was granted prospecting rights in 2008 for mining activities around the Okavango Delta panhandle which license included an area within the Delta’s buffer zone.

However, Botswana entered into an agreement with UNESCO in 2013 to have the Okavango Delta listed as a UNESCO World Heritage Property. In accordance with the listing Botswana would not permit any mining activities including prospecting anywhere within buffer zones of the Delta.

Concerns were raised by UNESCO that potential impacts from mining including in and outside the buffer zone may have direct and indirect impacts to the Okavango wetlands property, including water pollution.

Botswana would be expected to work with other parties to the Delta (Namibia, Angola) to monitor any potential impacts “including from potential diamond mining in Angola” which could impact water flow or water quality in the Delta.

However, having already issued a prospecting license to Qcwihaba Resources the Botswana government immediately found themselves in contravention of the UNESCO provisions following the 2014 eventual listing of the Delta as a Heritage Site. The government spent the next eight years lying to UNESCO about Gcwihaba Resource’s prospecting rights while trying to wrestle the license away from the mining company.

While Botswana said the area of prospecting encroached into the buffer zone while Qcwihaba Resources argued that in fact, the opposite was the case. That it is the buffer zone that had encroached into their prospecting area since the license had been issued prior to the UNESCO listing.

It was not until the company’s license (number PL020/2018) expired that Botswana sought to keep the Okavango buffer zone in question outside the next prospecting license, now the subject of a lawsuit at Maun High Court.

Qcwihaba Resources Managing Director James Bruchs wrote a letter in April 27, 2022 to the Minister on Minerals which letter forms part of the annexures to the court documents.

In the letter, Bruchs informs the Minister of Minerals Lefoko Moagi and Director of Department of Mines Ofentse Ditsele about the company’s demand for compensation for business lost as a result of leaving out a “portion of the resource” in the buffer zone. The company also wanted compensation for exploration costs. “If there is further delay in awarding the license, we request that the State Party reimburse us for its’ taking what is legally ours, the exploration costs {+25M USD) and the present value of the in-situ value ($6-7Billion USD) of that portion of the resource in the buffer zone,” the letter reads.

Bruchs argues that it is clear from Botswana’s submissions to UNESCO since 2013 that both mining and prospecting licenses can exist within the buffer zone. “Accordingly, we are agreeable, as we have always been, to conduct our activities consistent with the prevailing law and we assure you that our goal is to advance our project in an environmentally friendly manner. Accordingly, as we are in full compliance with all laws, we respectfully request that PL020/2018 is renewed as we have proposed as it is now almost 11 months since we filed for its renewal.”

The mining company maintains that chronologically, the buffer zone encroached on our license area as their license existed six years prior to the buffer zone being established a Heritage Site. That in fact, a compliant “NI 43-101 441Mt resource report” was prepared and filed prior to the buffer zone and the Okavango Delta World Heritage Property being established.

“We agree with your (Botswana government) sentiments that if mining were to take place within the buffer zone that an Environmental Impact Assessment (EIA) must first be conducted and made part of any mining application and further an Environmental Management Plan (EMP) must be filed before exploration activities are to be conducted. The foregoing is consistent with the Mines and Minerals Act, the Environmental Assessment Act of2010 and the Environmental Regulations of 2012 and are applicable not only to us but to all resource activities in the country,” a letter from Gcwihaba Managing Director reads.

A Savingram written by Department of Mines Director, Ditsele, to Permanent Secretary in the Ministry of Mineral Resources Johannes Tsimako dated April 14, 2022 confirms Gcwihaba Resources’ argument that it was in fact the buffer zone that encroached into the prospecting area. “In 2018 Gcwihaba was re-granted prospecting licenses numbers 020-024/2018 previously issued to the company in 2008 as PL386-390/2008. These were re-granted as new licenses rather than as renewals on grounds that Gcwihaba release the licenses that fell within the buffer zone for Okavango Delta World Heritage Site.”

Ditsele goes on to confirm Gcwihaba had spent funds and carried out work on the areas that they were now requested to surrender, to give way to the ‘new’ Okavango World Heritage Site where prospecting activities are prohibited and/or will be subjected to stringent EIA measures.

He says in the Savingram that the initial renewal application received on July 2nd 2021, prospecting licenses numbers 020- 024/2018 encroached into the delta’s buffer zone, and that the company was requested to revise their submissions.

“Upon the re-submission of the modified licenses boundaries, prospecting license number 020/2018 still encroached into the buffer zone. The applicant was further engaged to realign the boundaries of the prospecting licence number 020/2018 with the buffer zone boundary of the Okavango Delta or otherwise submit an approved Environmental Assessment Statement for the area, but to no avail.” The Mining Department Director also makes reference to a letter dated 5th December 2021 in which “purportedly following engagements with the Honourable Minister” Gcwihaba proposes that they be granted a renewal with the license encroaching into the buffer zone to enable them to engage with Mineral Development Company Botswana (a company owned by the government) on a pending funding and investment agreement.

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