Botswana Unveils New Rule to Boost Local Ownership of Mining Sector

The southern African nation is making a bold shift to give local investors a bigger stake in its mineral wealth as diamond revenues decline.

Botswana has introduced a major change to its mining legislation, aiming to increase local participation in the lucrative sector. The revised rule, which came into effect on October 1, mandates that companies must sell 24% of new mining concessions to local investors if the government decides not to acquire the stake itself.

This new regulation replaces a previous clause in the Mines and Minerals Act, which only allowed the state to purchase a 15% shareholding in any mining concession. Authorities say the change is part of a wider plan to ensure that the country’s mineral resources benefit more citizens directly.

Government Aims to Strengthen Economic Inclusion

The Ministry of Mines and Energy emphasized that the move is designed to empower Batswana, increase national wealth retention, and create opportunities for local businesses and communities to participate meaningfully in mining ventures.

Officials also highlighted that promoting local ownership will help reduce dependency on foreign entities and enhance the country’s resilience to global market fluctuations.

Global Diamond Market Pressures Spark Change

Botswana, the world’s top diamond producer by value, has faced economic pressure due to weakening global demand and the growing popularity of synthetic diamonds. The government has struggled to maintain its budget as revenues from diamond sales plunged in 2024.

Analysts say the new policy could encourage greater domestic investment in mining and help diversify Botswana’s economy beyond diamond extraction.

Revenue Decline Deepens Economic Challenges

Earnings from diamond exports fell by 50% in 2024, significantly affecting state revenues. According to the International Monetary Fund (IMF), Botswana’s economy is expected to contract for a second consecutive year.

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The GDP is projected to fall by 0.4% in 2025, after shrinking by 3% in 2024. Economic observers believe this downturn has accelerated the government’s push to keep more of the mineral wealth within the country.

Local Investors to Play a Bigger Role

By requiring companies to sell a quarter of their stakes to local investors, Botswana is aligning with broader trends in resource-rich African nations seeking to maximize domestic benefits from natural resources.

The rule is expected to create more opportunities for local entrepreneurs, boost capital markets, and enhance national economic sovereignty.

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