Botswana's New Mining Act: Empowering Locals with 24% Stake

Botswana is proposing a law requiring mining companies to sell 24% stakes in mines to locals if the government opts out of acquiring shareholding. The current law allows the government to acquire 15%. Recent transactions have seen the government forgo this option, intending funding to come from pension funds.

Botswana is planning a significant change to its mining laws, requiring companies to sell a 24% stake to local citizens if the government does not exercise its option to acquire shares. Currently, the government can purchase a 15% stake in new mining projects.

This proposed amendment comes as the government has opted to forgo its stake in recent deals, such as Lucara's acquisition of Karowe Diamond Mine and China's MMG's purchase of Khoemacau copper mine. Instead, companies will need to ensure that 24% of stakes are sold to local citizens or citizen-owned enterprises.

The revised law, championed by Mines Minister Lefoko Moagi, also suggests that funding for local acquisitions could be facilitated by the country's pension funds. These funds have recently been mandated to reduce offshore investments from 65% to 50% over the next three years, potentially freeing up capital for local investment.