The Leader of Opposition, Botsalo Ntuane, has told parliament that the time has come for the establishment of a state mining company.
He said this in response to the acting Vice President and Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe’s speech on the committee of supply on Monday.
“We draw inspiration from the Debswana model. If government can go into a venture with De Beers then the same can be done with other mineral sectors. What policy informs what stake we assume in mining companies? We need to consolidate all these mineral sectors under one entity,” Ntuane said.
The legislator said government must have a stake in every mining operation in the country as there were more benefits to be derived in the form of dividends in addition to taxes.
Kedikilwe told parliament that the depreciation of the US Dollar remains a significant challenge and threat to performance of the country’s minerals for the short and medium terms.
“The uncertainty of how long the recovery from the economic crisis will be and whether there is a possibility of another slum remains an overhang,” the acting VP told parliament.
The minister said the mining industry continues to expand with four mining licenses issued in the 2010/11 financial year for copper and diamond mines.
Year to year diamond production for 2010 as at end of October was 17,666 million carats against a target of 16,965 million carats. Year to year sale sales for 2010 as at end of October was 20.9 million carats against a target of 18.04 million carats. This was 15 percent above budget and revenue was P15.3 billion denoting 37 percent above budget.
The minister said the favourable revenue is mainly attributable to favourable sales, exceeding budget by 2.8 million carats and diamond prices that have slowly improved.
“The forecast is that diamond prices will improve by 9 percent in 2011. Forecasts of diamond revenue, which includes royalties, dividends and taxes for 2010/11 is P9.3 billion compared to P10.8 billion for 2008/2009,” said Kedikilwe.
The acting VP said there had been a positive improvement on the demand for diamonds last year and the slight improvement of the market resulted in the purchase of entire production series rather than selective purchasing as was the trend during the market down turn in 2009.