The Competition Authority has approved, unconditionally, the acquisition of shares in Morupule Coal Mine Limited by the Government and by extension the transfer of the acquired shares to Mineral Development Company Botswana Ltd.
According to a statement released last week Wednesday, “The Authority determined through the analysis of the facts of the merger, that the proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the market under consideration. The market structure in the mining and supplying of coal in Botswana, will not be altered, and as such does not raise any competition concerns.”
The Authority further adds that the decision is in accordance with the provision of section 55 of the Competition Act. It notes however that under section 66 of the Act the approval does not override or negate any other mandatory approvals or processes that any of the parties to the merger must comply with under the Laws of Botswana.
According to the company’s website, Morupule coal mine was first established in 1970 as a subsidiary of Anglo American, at the time under a different name, known as Morupule Colliery mine. Three years later it began production. The coal mine assumed its current name in 2011 following its expansion project the previous year. A decade prior to these developments the coal mine was taken under the complete ownership (100 %) of Debswana Diamond Mine; a joint venture between Government and De Beers Diamond Group.
Government has remained the common denominator across the changes that have taken place in the coal mine. Though it is announced that government assumes ownership of the asset, it is simply a transfer of ownership between companies that it has interests in. The Mineral Development Company Botswana Limited is a newly established company with the mandate of assuming the management of all of government’s interests across the mining sector.
Though the coal mine has undergone a number of expansionary projects to scale down the amount of electricity imported from South Africa ÔÇô estimated at 80 percent, the execution of the plan has failed to support the well-intended cause. The projects are notorious for failing to meet the growing demand for electricity by the domestic economy. It remains to be seen if there will be any improvement in project delivery.