Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Botswana President Mokgweetsi Masisi vowed to protect the country’s interests, including its 15% stake in diamond giant De Beers, should BHP Group Ltd. acquire Anglo American Plc.
Anglo, which rejected a BHP proposal valuing the mining company at about $39 billion, owns the other 85% of De Beers. Under the proposed deal, BHP — once a major diamond producer itself — said that De Beers would be put on a strategic review. Anglo, the only major miner with a big diamond business, has already been reviewing the future of units including De Beers.
Botswana has not been formally approached by either BHP or Anglo, Masisi said in a television interview Wednesday with CNBC Africa in Dallas, Texas.
“No way would we allow ourselves to willingly be made redundant or irrelevant,” the president said. “So Botswana will respond in ways that are protective of its interests.”
Botswana’s concerns potentially add to the swathe of challenges that BHP chief executive officer Mike Henry faces in pulling off an ambitious but complex deal. Antitrust authorities from China to South Africa and Japan are likely to scrutinize an acquisition that would create the world’s biggest copper producer.
BHP’s proposal, which includes a plan for Anglo to spin off its Johannesburg-listed platinum and iron ore units before an eventual takeover of the remaining assets, has already antagonized some members of South Africa’s government.
The diamond industry is gradually recovering after the sector almost came to a complete standstill in the second half of last year as De Beers and Russia’s Alrosa PJSC — the two biggest miners — all but stopped supplies in a desperate attempt to stem a slump in prices. That hit earnings at De Beers, which mines more than three-quarters of its diamonds in Botswana.
“The value of De Beers is fundamentally created by Botswana,” Masisi said. “That can never be missed by anybody.”
Botswana is the world’s largest producer of rough diamonds by value, with the revenues making up the bulk of the southern African country’s budget receipts. Anglo estimates that its total economic contribution to Botswana was $1.16 billion last year, with almost half of that coming from taxes and royalties.
De Beers agreed to hand over more diamonds to Botswana’s government in negotiations that concluded in the middle of last year, just as the latest deadline for a deal expired.
(By Mbongeni Mguni)
Comments
Mothati Bagwasi Gabasiane
Botswana needs to protect it’s resourceswithout fail