Law Matters – Keeping Abreast Of Botswana’s Changing Mining Landscape
Mining and minerals tend to form the backbone of the economies of most African countries. Botswana is no different. The success of the Botswana economy over the years is largely due to revenues realised from diamonds which continue to be the mainstay of the economy, currently accounting for more than one-third of GDP, 70-80% of export earnings, and about one-third of the government’s revenues.
While diamond mining still retains its place as the mainstay of the economy, in recent years there has been significant growth in the non-diamond mining sector. The latest buzzword is coal. Botswana is estimated to have coal deposits of 212bn tonnes, of which 7.1bn tonnes are said to be measured reserves.
As Botswana continues to try to move away from its heavy reliance on diamonds, coal presents a major growth opportunity. It has been recently reported that Botswana and Namibia have signed a bilateral agreement for the construction of the Trans-Kalahari Railway (TKR) Line. The proposed 1500km railway line will link some of Botswana’s coalfields with the port of Walvis Bay in Namibia. The main aim is to export coal to Asia, particularly China and India.
The construction of this proposed railway line along with the continued prospecting for and mining of other minerals in the country will most likely greatly increase the levels of mining activity. The question is whether the current mining and other associated laws in the country adequately address the legal aspects of the complex mining transactions that will arise as a result.
The current Mines and Minerals Act dates back to 1999, although by and large it provides an adequate legal basis for issues relating to mining, it is probably necessary for there to be a review of the Act to ensure that it caters for the current and future mining activity.
The bigger problem from a legal perspective arises with other legislation, which has not been reviewed or amended to cater for the ever-increasing mining and mining-related transactions. As an example, the Deeds Registry Act, which dates back to 1960, has not undergone any amendments specifically to deal with issues of registration of mining licences under the Mines and Minerals Act and the registration of various securities for financiers.
Another example is the Hypothecation Act, which provides for security for financiers by way of deeds of hypothecation, but has likewise not been amended since its enactment in 1977. It is, however, encouraging that in 2013 the Registrar of Deeds requested legal practitioners to present their views on possible amendments to the Deed Registry Act. It is hoped that this will provide an opportunity for the Act to be updated to deal with the current legal issues relevant to mining. Given the importance of mining to the country, it is vital that a proper and modern legal framework be in place to regulate mining and the transactions relating thereto.