Saturday, October 24, 2020

Morupule Coal mine sale nearly complete

A sale transaction of the Morupule Coal Mine (MCM) by De Beers Company to Botswana government’s Minerals Development Company of Botswana (Pty) Ltd (MDCB) is said to be at an advance stage. 

Minerals Development Company Botswana (Pty) Ltd is a new mining investment holding company wholly owned by the government of Botswana and has been established to hold and develop all of the government mining interests and its purpose is to optimise returns to government from its equity stakes in the mining industry.

The company have full capacity, rights, powers and privileges within and outside the country to undertake any business, or enter into any transaction in the global mining industry.

De Beers, a unit of Anglo American announced in June 2016 plans to sell its 50 percent stake in Morupule coal mine to MDCB.

The company’s move is said to be part of a plan by Anglo American to cut down its commodities portfolio.

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. 

In late June 2016, the Competition Authority 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. 

In an interview with Sunday Standard, this week, Chief Executive Officer (CEO) at MDCB Paul Smith said that the sale transaction has since reached its final implementation stage. 

Once finalised, the De Beers’ stake in the mine including all the assets will be transferred to the newly formed minerals company owned by the government. 

Smith further stated that De Beers is a focused diamond miner hence the reason its parent company, Anglo American’s decision to sell its interest in MCM.

 “Global commodity prices are low, and mining margins are under pressure. This transaction is part of Anglo American restructuring plan. De Beers and Debswana will be focusing on Diamonds only,” Smith stated.

A close look into the performance of Debswana Diamond Company for this year’s 1st quarter of 2016 and compare it with the previous 2 years shows that Debswana production for Q1 2016 was 5.3 million carats and the 1st quarter of 2015 production was 5.6 million carats whereas in that of 2014 it was 5.8 million carats.

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