Botswana has introduced a new regulation requiring mining companies to sell a 24% stake in new concessions to local investors if the government opts not to purchase it.
This rule, announced by the Ministry of Minerals and Energy, took effect on 1 October, reported Reuters.
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Previously, the Mines and Minerals Act allowed the government a 15% shareholding in mining concessions, with a higher stake option in diamond projects.
The southern African nation, one of the world’s top diamond producers by value and a rising copper mining hub, aims to increase local ownership in its mineral wealth.
The legislation is designed to encourage local value-added initiatives and mandates that mining companies create funds dedicated to environmental rehabilitation.
During parliamentary debates on the Mines and Minerals Act amendment, the former mines minister suggested that local investors could acquire stakes in concessions with support from domestic pension funds.
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By GlobalDataLast year, a law change required these funds to reduce offshore investments from 65% to 50% over three years.
The government, through the state-owned Minerals Development Company Botswana, holds equity stakes in Morupule Coal Mine (100%), Debswana Diamond Company (50%), De Beers (15%), and indirectly in Minergy via convertible debt.
Last month, Bloomberg reported that Botswana sought to close a deal to acquire a majority stake in De Beers by the end of October as negotiations continue with Anglo American, the diamond miner’s controlling shareholder, and other interested buyers.
The Government of Botswana, which already holds a 15% stake in the diamond company, aims to increase that to more than 50%.
Botswana President Duma Boko then stated that talks were under way with partners, including with Oman’s sovereign wealth fund, to fund the acquisition.
