Tuesday, December 7, 2021

BSE says it has a role in the mining value chain

Botswana Stock Exchange Chief Executive Officer (CEO) Thapelo Tsheole says the BSE has become a prominent mining exchange given the confidence that mining companies have bestowed upon it over the years. He said this at the recent Botswana Resource Sector Conference which was held in Gaborone last week.

With Botswana’s vast coal deposits, Tsheole said the country can significantly benefit from the by-products of coal or from processing other raw materials such as base metals. “I think investors are still bruised from the significant losses incurred during the financial crisis where share prices collapsed seriously and some companies closed as they either could not operate viably or the prices of their mineral produce collapsed in global markets,” said Tsheole.

He believes that Botswana has the requisite mineral resources, the human capital, the funds, regulatory framework and a favourable political environment which are all important to propel the country to greater potential as a resource driven economy and as a benefactor of the mining value chain. He added that the BSE plays an important role in this setup.

He observed that companies like Lucara have continued to deliver sterling results, despite other companies closing due to the tough economic environment. Tsheole also said Shumba Energy has been resilient to a point of dual listing in Mauritius, while African Energy and Botswana Diamonds are still giving a positive outlook. He said these are just some of the few examples of companies that can give BSE an idea of how the opportunities are different from the credit crunch years in 2010.

He believes that there is need to assess each offering on a case by case basis so that investors can adequately capture value where or when it is available.

“Mining is very risky and capital intensive which means there is always a lot of capital at stake. The biggest challenges from our experience are lack of price discovery, lack of tradability and lack of liquidity. Post the financial crisis, these stem from very high risk aversion amongst the local investor base,” he stated.

Tsheole spoke of the BSE‘s contribution to Botswana’s mining economy which he said is primarily through its ability to support junior miners who are still at the early stages of development and of the value chain prospecting and feasibility studies. He is of the view that this speaks to their very important role of providing a platform for investors, and brings to life business ideas that contribute to economic growth.

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