Report

An Assessment of the National Mining Legal Frameworks and Policies of SADC Countries against the Africa Mining Vision (Cluster 1: Mining Revenues and Mineral Rents Management): The Case of Botswana

This report is an assessment of the extent to which the mining policies and legal frameworks of Botswana are in line with the aspirations of the 2009 adopted Africa Mining Vision (AMV), whose goal is to promote “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development”. This national study contributes to a broader regional study focusing on eight SADC countries, i.e. Angola, Botswana, Malawi, Mozambique, South Africa, Tanzania, Zambia and Zimbabwe. Given the significant role of the mining sector in the economies of these countries, particularly mining exports and mining revenue contributions to total government tax revenue, the assessment was solely focused on the fiscal issues of mining as guided by the AMV Action Plan Cluster One on Mining Revenues and Mineral Rents Management. This cluster aims “to create a sustainable and well-governed mining sector that effectively garners and deploys resource rents”. It identifies a variety of activities and monitoring indicators for promoting two expected outcomes namely an enhanced share of mineral revenue accruing to African mining countries and improved management and use of mineral revenue. It is against these activities and/or monitoring indicators that the mining policies and legal frameworks of Botswana are evaluated in this study. The study mainly used a qualitative analysis approach to address the objectives set out in the Terms of Reference. The main findings of the assessment for Botswana are summarised below. Major reviews of the fiscal, legal and policy framework for mineral exploration and mining in Botswana include the 1999 amendment of the Mines and Minerals Act and the 2006 amendment of the Income Tax Act. The review of the Mines and Minerals Act resulted in the abolition of the government’s right to a 15 percent free equity participation in all new mining projects, replaced by an option to acquire up to 15 percent working interest participation, with the view of increasing government revenue through dividends. Although these amendments were before the 2009 adoption of the AMV, the mining regime has been competitive enough to enhance mineral revenue accruing to the country. Botswana has also signed Double Taxation Agreements (DTAs) with the host countries of some of its major mining companies such as South Africa.