A Canadian Mining company licensed by Botswana government to prospect for minerals in the Okavango Delta has dragged government to court for refusing to renew its license after the company discovered tonnes of inferred iron resource within the prospecting area.
In a case which was recently heard before Maun High court, Gchwihaba (PTY)LTD alleges that the government has refused to renew its license since 2021 and threatens to demand compensation that could run into billions of Pula if they lose the licensing deal.
On the other side, the government maintains that it cannot renew the license as the company was never given mining rights and that it cannot be given such right to continue prospecting and to mine in a world heritage site’s core and buffer zones.
However Gchwihaba maintains it has a strong case against the government and that the heritage issue is just an excuse to take away what they had worked hard for.
“Before relaying the events which transpired in 2021, it is worthy to note that in July 2014, the Okavango Delta was declared a World Heritage Property “WHP” by the United Nations Educational, Scientific and Cultural Organisation “UNESCO”. By virtue of this status, the Okavango Delta “nominated property” was subject to protection from activities which would compromise the property. This area is also referred to as the core zone,” explained the company’s office administrator, Moagi Ntukununu in a founding affidavit.
Ntukununu was testifying on behalf of his employer, Gchwihaba who is the company’s managing director and Chief Executive Officer (CEO), James M Bruch.
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The company’s further contention is that their licensed area did not fall into the core zone, but that Botswana government established a buffer zone around the core zone and in the process encroached into Gchwibana Resource operating area. According to Gchwihaba, a buffer zone does not form part of a core zone.
This they posit was what the government understood when they renewed their license after 2014, including renewals done by minister Eric Molale in 2016 and 218 despite the existence of the buffer zone.
The company was initially granted the license in 2008, by the then Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe (PHK), to prospect metals in a land measuring 570 square kilometers in Ngamiland district. The license’s duration was three years.
In addition the same company was granted six additional licences during the same period to operate in the same area and under the same condition.
Prior to the licensing, the company had to demonstrate to government that amongst others, it has, or has secured access to adequate financial resources, technical competence and experience to carry on effective prospecting operations. The company maintains it expended a sizeable fortune to secure the licenses and accordingly implemented its project plans.
In 2011 the company applied for renewal and Kedikilwe granted it. The licence was renewed again in 2014, 2016 and in 2018, but in 2021 the government refused to renew it.
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“Starting in 2013 and prior to OKD designation as world heritage site Minister Onkokame Mokaila and Permanent secretary Boikobo Paya informed us on numerous occasions in 2013, 2014,2015 and 2016 that the Botswana government would not allow the placement of any arbitrary boundaries against the development of its natural resources for the benefit of its people. In fact Ministry staff several times commented about the problems that would occur if an Orapa was found in the core zone. More to the point we were informed by Minister Mokaila that he in fact held high level talks at the end of 2015 with his counter part Minister TS (Tshekedi) Khama at the Ministry of Environment, National Resources and Conservation and he stood firm in his resolve that the buffer zone was not off limits to prospecting or development.”
However, “The non-renewal came as a shock to the Applicant in view of the fact that in 2014, the applicant had produced and shared with the First Respondent, an inferred resource report which established that the applicant had discovered a tonnage of 441 Mt of inferred iron resource within the prospecting area with a current in-situ value approximated to be worth $27 Billion USO, of which 1 164 Mt worth $6.8 Billion USO is located within the buffer zone,” further reads the affidavit.
In reaction to the discovery, the government made some statements in June 2014 and advised the public about the news and further note that it is willing to co-finance Gchwihaba’s project even speaking further about its importance to the development of the Botswana economy.
“The article refers to Tsodilo Resources which is the Applicant’s mother company. It must be highlighted that this is the same year that the Government of Botswana was working on having the Okavango Delta being named as a WHP but prior to such designation, however, the Government of Botswana was aware at the time of its public statement, that the Applicant’s licensed area would fall into the buffer zone,” further contends Gchwihaba in court.
Nonetheless the following year, 2015, the same government issued out a Report to the World Heritage Committee (WTC) indicating that prospecting and mining licenses in the buffer zone would not be renewed.
The government is said to have further reported that they were engaging in negotiations with the Gchwihaba Resources or its mother company (Tsodilo Resources) for purposes of terminating the existing licenses in the buffer zone and that negotiations with the company to relinquish its licenses were ongoing.
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In 2020, the Government issued yet another report to the WTC confirming that negotiations with the said company had been concluded and that there were no existing prospecting licenses in the buffer zone.
“All of the reports referred to above, as generated by the government of Botswana were a lie. Not only were there no negotiations between the parties, but the first respondent (government) continued to grant the applicant prospecting licenses for areas In the buffer zone, save for the renewal of 30 June 2021,” further reads the affidavit.
The company argued that the benefit of renewing the said prospecting license far outweighs the opposite decision not to renew, more especially that the government is currently broke owing to aftermath of COVID 19 pandemic that crippled the world’s economy, “It is not a secret that the Government coffers are dry and in turn the Government is struggling to create jobs; improve its health care; maintain its roads, schools and infrastructure. It is also not a secret that the Government, through the President of the day, is actively seeking ways in which the Government can generate more revenue.”
However the government views it differently and says interests of an individual company cannot surpass those of the country’s economy and livelihoods of communities living in the Delta.
“The public interest demand that a natural gift like the Okavango Delta and its inhabitants should be jealously protected from any form of destruction. Whatever inconvenience that the applicant (Gchwihaba) may suffer is of financial nature and pales into insignificance compared to the economy of the country since the economy of Botswana is amongst others, tourism driven,” the government responded in an affidavit.
Continuation of encroachment by Gchwihaba’s prospecting license into the buffer zone of a world heritage site according to the government will expose Botswana to risks of adverse publicity from International environment pressure groups, possible sanctions and boycotts as a result of possible perceptions that Botswana government is flouting guidelines for protection of world heritage sites by continuing to license prospecting activities within the buffer zone and that without an approved Environmental Assessment statement.
The further contention is that the said company does not even hold mining rights so as to be in a position to claim the value of the mineral resources in the Delta, since there was no guarantee mining rights will be granted over the area in question. The compensation claim is unreasonable and not sure what informs the claim,” argued government.
Justice Bugalo Maripe is expected to make a ruling on the Matter in August this year.