In the midst of the global economic crisis, the Chief Executive Officer for Capital Asset Management, Leutwetse Tumelo, urges that the forthcoming Botswana Resource Sector conference will be more important because stakeholders will have a bird’s eye view on the wealth that lies below the ground.
Some traditions are hard to break. That is why the Capital GroupÔÇöthat initially started as a stockbrokerage firm now turned into an international company replete with asset management ÔÇöstill insists that the annual Botswana mining conference should go ahead despite the fact that a number of exploration and mining companies are finding it hard to operate.
“I think after the events of the last 12 months it (the conference) would probably give an insight on what is happening,” Tumelo said.
Over the past year, a number of mining projects were either scaled back or put on hold as the world economy got a hit from recession. The recession initially started as sub-prime crisis in the United States of America housing market but quickly spread to other sectors of the global economy and it affected consumer and investor confidence around the world.
In Botswana, a number of companies, including the likes of African Copper, Discovery Metals, the giant diamond mining company in the world Setswana Diamond Company — which is the back bone of the country’s economy —and Tati Nickel found themselves faced with financial trouble.
Other sectors which got a whack include the diamond beneficiation process which suffered from the recession.
“We expect government to give an update and the forthcoming conference because a lot of things have changed since the last quarter of last year. We have a situation where some projects are being scaled-down while others are being put on hold,” Tumelo said ahead of the fifth conference that starts on June 10.
Minister for Minerals, Ponatshego Kedikilwe, head of beneficiation process, Akolang Tombale, and executives of mining companies are expected to give presentations at the two-day conference.
However, the conference comes at a time when there is some optimism that the world economy is falling back on track after major economies injected cash into the system in a bid to encourage consumption in the system.
“I think in the next few months we are likely to see some stability,” he said with a cautious optimism.
“The economy is not out of the woods yet. It does not mean that if the USA economy and other industrialized nations recover now it does not mean that it will automatically happen here,” he said, adding that might filter here in the next 24 months.
He said Botswana economy is still to feel the effects of global recession as it will realize a short fall in royalties and taxes as most of the mining companies have scaled-back their production.
However, he pointed out that Botswana is likely to emerge from this recession with more growth in the mining sector given the strong interest shown by exploration and mining companies.
“The possibility of getting out of these would be more growth,” he said, adding that “as commodities recover then the share prices will start to recover,” but indicated that would be in the next 24 months. However, the expected growth is expected to lower than the levels of 2007.