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Botswana Mining Report Q2 2016

Botswana Mining Report Q2 2016

BMI View: The expansion of Botswana's mining industry will be tempered by weakness in global diamondprices over the next few quarters, with the country's largest producer, Debswana, revealing plans to scaleback production at two of its mines over the next three years. A sluggish diamond sector will be mitigated toan extent by rapid expansion in thermal coal mining as the government aims to become a net powerexporter within the next few years. Growth in thermal coal output will pave the way for the gradual, butlong-awaited, diversification of the country's mining sector.

Latest Updates & Structural Trends:

We have revised our medium-term production forecasts for Botswana downwards this quarter, followingthe announcement that the country's leading producer, Debswana, will suspend operations at one of itssmaller mines, citing the recent collapse in global diamond prices. The company will also downsizeoutput at another facility for a period of three years. With Debswana accounting for the bulk of thecountry's diamond output, we consequently forecast output to contract by 6.1% in 2016 to 21.8mn carats(mnct). Growth levels will be muted thereafter, growing by 1.4% a year on average through to 2020.

Nevertheless, we continue to maintain the view that Botswana will become an increasingly importantdestination for global mining investment due to its stable political and economic environment. InDecember 2015, Canada's Lucara Diamond Corp announced plans for an expenditure of USD15-18mnon an additional large diamond recovery process at its Karowe mine. The company stated that the mine isestimated to treat between 2.2mn and 2.4mn tonnes of ore in 2016, producing around 350,000ct ofdiamonds.

BMI Industry View
Table: Botswana Mining Industry Value Forecast (2015-2020)
Industry Forecast
Diamonds: Output To Recover In 2016
Latest Updates
Structural Trends
Table: Botswana - Main Diamond Projects
Table: Diamond Production (Botswana 2013-2020)
Coal: Increasingly Key To Energy Mix
Latest Developments
Structural Trends
Table: Botswana - Coal Deposits
Table: Coal Production Forecast (Botswana 2013-2020)
Industry Risk/Reward Index
Botswana Risk/Reward Index
Industry Rewards
Country Rewards
Industry Risks
Country Risks
Africa: Major Risks Remain
Key Takeaways
Latest Revisions
Table: Africa - Mining Risk/Reward Index
Regulatory Development
Table: Africa - Mining Regulatory Outlook
Africa: Major Risks Remain
Key Takeaways
Latest Revisions
Table: Africa - Mining Risk/Reward Index
Commodities Forecast
Commodities Outlook
Table: BMI Commodities Price Forecasts
Competitive Landscape
International & Domestic Key Players
Company Profile
Anglo American
Company Strategy
Latest Results
Table: Anglo American - Financial Data
Global Company Strategy - Norilsk Nickel
Company Overview
Company Strategy
Table: Norilsk Nickel - Supply Chain Analysis
Table: Norilsk Nickel - Key Financial Data
Regional Overview
Table: SSA - Government Involvement In Mining Sector
Industry Forecast Methodology
Risk/Reward Index Methodology
Table: Weighting Of Indicators

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