Compliments of the new season! Remember as Albert Einstein says, ‘Insanity is when you do the same thing over and over and expect different results’. Take time to make some changes as the year begins and determine to keep showing up for a better 2023.
As a market research firm, we hope to continue bringing valuable insights through our articles, and today we focus on the latest trends in mineral production in Botswana with particular emphasis on copper.
The demand for copper is quickly surpassing its supply, which is increasing its price. Even though copper is a fantastic electrical conductor and is used in everything from cell phones to the underwater cables that power the internet, it is unavoidably becoming increasingly scarce and expensive. The growing popularity of electric vehicles, which require twice as much copper as conventional vehicles is another argument in support of the growing demand for alternative conductors.
Why is this key?
According to a recent Statistics Botswana publication, the Index of Mining Production stood at 88.9 during the second quarter of 2022, showing a year-on-year growth of 3.8%, from 85.6 registered in the second quarter of 2021. The main contributor to the increase in mining production was Copper in concentrates, contributing 7.6 percentage points.
Copper in concentrates produced during the second quarter of 2022 was 8,324 tonnes. The quarter-on-quarter analysis shows that production increased by 45.9% (2,618 tonnes) during the second quarter of 2022 compared with 5,706 tonnes produced during the first quarter of 2022.
The increase in copper production output is largely attributed to the strong demand for the commodity in the international market coupled with rising prices. This led to increased output from the newly commissioned mining operations in the country. However, in terms of quantities, Botswana is still just scratching the surface. The top copper-producing countries like DRC and Zambia, for example, produce hundreds of thousands of metric tonnes (MT) per year. DRC is reported to have recorded 1.88 million MT of copper while Zambia more than 880,000MT in 2021. These two countries are also in the top 10 copper producers in the whole world.
Namibia is another rising hotspot for copper mining attracting international mining companies and making it into the top 5 copper producers in Africa with current production of more than 10,000 MT per year. Owing to the lucrative market prices, neighbouring Zimbabwe is said to be planning to revive its copper production after some copper mines were closed in 2000 due to poor international prices then.
Research is key
Although the production of copper is on an upward trend, policymakers should be alive to the fact that revenues associated with its exportation are likely to fluctuate due to the presence of other lighter and cheaper alternatives. On the metals exchange, the other challenge for base metals such as copper are that they are price takers and over reliance of their sales may dampen any sustainability plans. Thus, the production of the base metal may be channelled to local consumption. Available data indicates that the sector still leads in terms of value-added contribution to GDP, and despite its great contribution to Botswana’s GDP, the mining industry is capital-intensive and accounts for less than 5% of employment in the private sector.
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