HomeDiamonds & GemstonesBP's Botswana exit will not affect diamond mines

BP’s Botswana exit will not affect diamond mines

BP prepares to
leave five African
Gaborone, Botswana — MININGREVIEW.COM — 19 March 2010 – Oil company BP Plc “’ the biggest supplier in Botswana “’ says the group’s planned exit from the country would be smooth, allaying fears of supply disruptions to the world’s biggest diamond mines.

BP announced earlier this month that it would sell its assets in five southern African countries including Botswana as a result of a strategic review, causing jitters in the crucial diamond sector “’ but the British group said its exit would not be disruptive.

Botswana’s minerals sector accounts for 40% of total output and the same proportion of Botswana’s government revenue.

BP Botswana general manager Mahube Mpugwa said the company, which supplies the Debswana diamond mines and a copper mine, expected its pull-out could take up to 18 months to complete.

“I can’t divulge any numbers or names at the moment, but we have received many enquiries from both the region and overseas. These are all being handled by our acquisitions and mergers division in London,” Mpungwa told Reuters.

Debswana owns Jwaneng “’ the biggest diamond mine in the world by value “’ and the operation is currently undergoing a US$500 million (R3.75 billion) expansion which will require a lot of fuel.

Debswana is a 50/50 joint venture between the government of Botswana and De Beers, which is 45% owned by global mining group Anglo American plc, and averages an annual output of around 33 million carats of diamonds.

“We have been engaging BP during the last few weeks on this subject, and assurances have been given by BP that they will honour their obligations to Debswana,” company spokesperson Esther Kanaimba said.

BP “’ which is also withdrawing from Zambia, Malawi, Tanzania and Namibia “’ has been in Africa for over 80 years.

Reuters reports that potential buyers of BP’s assets could include Engen Limited, majority owned by Malaysia’s Petronas, and Kenya’s KenolKobil.