Botswana Mining Industry overview Outlook

1. �Botswana Mining Industry overview & Outlook� Nchidzi C. Mmolawa Department of Mines

2. Presentation outline Role of Mining Brief Background Attractions for Mineral Investors Industry Review Economic Contribution of Mining Reportable Accidents Trends Mineral Beneficiation Challenges

3. Mining Play an Important Role In: Employment creation Poverty alleviation / reduction Technological breakthrough & Transfer

4. Brief Background of Mining in Botswana Mineral rights are vested in the state After completion of Prospecting you can apply for a; Retention licence (3 yrs exclusive rights and 3 yrs renewal for Non exclusive rights) Mining licence (25yrs and unlimited renewals of 25yrs Max). Minerals permit (5yrs and unlimited renewals of 5yrs Max, for Small scale mining).

5. Attractions for Mineral Investors Excellent infrastructure Well-educated and highly trainable workforce Good governance Excellent track record for dealing fairly with investors Security of tenure A commitment to customer satisfaction

6. Strategy to Attract Investment Commitment to maintain investor attractive Mineral Policies Maximizing the economic benefits for the nation while enabling private investors to earn competitive returns Create a competitive environment that will stimulate private sector investment in mineral exploration and mining operations Promote opportunities for linkages to the economy to expand value-added activities

7. Strategy to Attract Investment Commitment to maintain investor attractive Mineral Policies � Cont� Generating employment and training for Botswana�s citizens Safe guarding the environment

8. Strategy to Attract Investment Commitment to maintain investor attractive legislation Mines and Minerals Act Amended in 1999 to; Abolish government�s right to free 15% equity to a mutually-agreed commercial terms Downward revision of royalty rates 5% to 3% (except precious stones and metals) Simplification and predicable process for granting Mineral concessions and transfers (removed Ministerial discretions)

9. Strategy to Attract Investment Commitment to maintain investor attractive legislation New Fiscal regime; Variable Rate Income Tax Rate The higher of the standard company rate (25%) or the tax rate derived from the formula 70-1500/x, where x (%) = taxable income/gross income Immediate write-of of 100% CAPEX unlimited carry forward of Tax losses

10. Strategy to Attract Investment Commitment to maintain investor attractive legislation New Fiscal regime; Mining equipment and spares zero-rated on import duty Smelters, refineries, and other downstream processes classified as Manufacturing attracting low and negotiated tax rates 0 � 15% (tax holiday issued to deserving cases i.e. contribution to the economy)

11. Industry Review -Coal

12. Industry Review -Coal

13. Industry Review �Soda Ash & Salt

14. Industry Review �Soda Ash & Salt

15. Industry Review �Diamonds

16. Industry Review �Copper & Nickel

17. Messina Copper Botswana � Subsidiary of African Copper PLC Mining Licence issued in December 2006 Construction commenced Industry Review �Copper & Nickel

18. Economic Contribution of Mining

19. Economic Contribution of Mining

20. Reportable Accidents Trends

21. Mineral Beneficiation Historically countries endowed with mineral resources, develop mineral based economies Irrespective of proper management, most of these countries remain poor Minerals are exported as raw materials at ore and metal stage, limited or no value addition Diversification of mining related activities, including down-stream mineral beneficiation

22. Mineral Beneficiation

23. Challenges Skills shortages in the country due to high demand as new mines open Distribution of Power and Portable Water to new and existing projects HIV/Aids

24. Thank You Contact Department of Mines P/Bag 0049 Gaborone Tel (267) 365 7000: Fax (267) 395 2141 www.mines.gov.bw