Diamonds lead Botswana minerals production in Q1, 2014

diamondsThe Index of Mining Production in the first quarter of 2014 stood at 96.2 showing a year-on-year growth of 16.7 percent with the main contributors to this growth being diamonds contributing 21.0 percentage points while Gold and Copper contributed 0.3 and 0.2 percentage points respectively.

Statistics Botswana said in its latest release that minerals which registered negative contributions to the growth of mining production were Copper-nickel-cobalt matte with a decline of 4.3 percentage points, Soda ash, Salt and Silver, each contributing a decline of 0.2 of a percentage point.

“Year-on-Year percentage in the volume of mining production by mineral group and minerals for period 2004 to 2014 first quarter showed diamond production grew by 26.0 percent in the first quarter of 2014 as compare to 2013 first quarter.”

“The increase in production was largely due to plant maintenance which was done at Orapa during 2013 first quarter. Production as a result, increased following plant maintenance,” the report showed.

Copper-nickel-cobalt matte production shows a decline of 46.8 percent in the first quarter of 2014, when compared to 2013 first quarter. “This was primarily due to a drop in both the metal content and ore tonnage. Copper production recorded increase of 3.1 percent between the first quarter of 2013 and 2014 first quarter. The increase in production was brought about by improved operational stability.”

Gold production increased by 25.8 percent from 2013 first quarter to 2014 first quarter. Soda Ash production shows a decline of 11.4 percent in the first quarter of 2014 as compared to 2013 first quarter. The decrease in production was primarily due to plant breakdowns that were experienced at the mine.

Salt production in the first quarter of 2014 indicates a drop of 29.3 percent as compared to the corresponding quarter of the previous year. The decrease in production is mainly due to plant breakdowns that were experienced at the mine.

Silver production started during 2013 first quarter, however the first quarter of 2014 shows a drop of 28.4 percent in production as compared to 2013 first quarter. Coal production decreased by 11.7 percent in the first quarter of 2014. The decline can be attributed to the low offtake at Morupule Power Plant.

This statistical release is the first to be published by Statistics Botswana and is a product of Industry Statistics Section. It is intended to shed light on Mining Production by presenting Quarterly Indices of Mining Production by Mineral Groups, Year-on-Year Percentage Change in the Volume of Mineral Production by Mineral Group as well as Contribution of each Mineral Group to the Year-on-Year Percentage Change in the Volume of Mineral Production. This report uses 2013 as a reference year. Data used in this publication is sourced from the Department of Mines at Ministry of Minerals, Energy and Water Resources.

The current release presents quarterly Indices of Mineral Production (IMP) for the period 2005 to 2014 first quarter. Also carried in the report are annual indices of mining production for the period 2005 to 2013 (derived as the average of four quarters of the year).

Background Information

Mining activity in Botswana started in the 19th century with production of gold by Europeans from the Tati reefs which is now modern Francistown area. However, much of this activity could not be accounted for, despite its significant contribution to the economy at the time. Modern mining in Botswana started with the mining of diamonds at Orapa in 1971 followed by copper-nickel production in 1973 at Selibe Phikwe. Since the early 80s, the mining industry has been the largest contributor to real Gross Domestic Product (GDP).

During the second of 2006/07, the mining sector contributed 43.2% to the GDP (National Accounts Stats Brief, 2007). In 2009, the mining sector’s share in the GDP was 39.2% (National Accounts Statistics Report, 2009).

These mineral contributions enabled the government to undertake investments, in both human and physical infrastructure development over time. In 2012, the mining sector accounted for 19.6 percent of Botswana’s GDP, and more than 50 percent of Government revenues (National Accounts Report, 2012). Even though the mining sector’s contribution to GDP has been below 25 percent since the 2009 economic recession, available data shows that the sector still leads in terms of value added contribution to GDP.

Despite the great contribution to Botswana’s GDP, the mining industry is capital intensive and accounts for less than 5 percent of the private sector employment.

With such a significant contribution to economy, the need for a measure of change in the production of minerals in Botswana cannot be over emphasised. The index of physical volume of mining production is such a measure that provides a relative change over time in the mining production. IMP can also be used as a deflator to calculate GDP at constant prices.

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