(Poster session/Short oral-presentation) Earth & Resources

[2107-24-15] Assessment of Botswana’s mining investment attractiveness focusing on the geological potential and fiscal regime

○LEBOGANG LOETO^{1[Master’s course]}, Tsuyoshi Adachi¹, Hisatoshi Toriya¹ (1. Akita University)

Chairperson：鳥屋 剛毅（秋田大学）

Keywords:geological potential, fiscal regime, Net Present Value, Internal Rate of Return (IRR), Average Effective Tax Rate (AETR)

This study aims to assess the geological potential and fiscal regime of Botswana and their impact on determining the attractiveness and competitiveness of mining investments. Mineral deposits form through ancient geological processes, beyond countries' control. This assessment will estimate Botswana’s endowment from the reporting codes-compliant reserves and resources inventory and further conduct an econometric analysis of the value added by the mining industry and its contribution to the GDP using the endowment factor concept. The IMF advises evaluating tax policies for extractive industries through project-level economic and financial analysis. The study will utilise a discounted cash flow (DCF) model to estimate net present value (NPV), post-tax internal rate of return (IRR), payback period, breakeven price, average effective tax rate (AETR), marginal effective tax rate (METR), and progressivity of the fiscal regime of the Khoemacau copper mine project from the perspectives of investors and the government, then perform sensitivity analysis. Botswana's mining sector faces challenges like volatile mineral prices, limited foreign direct investment (FDI) inflow, excessive reliance on diamond revenues, and the risk of depleting diamond reserves despite being ranked as one of the most attractive African jurisdictions. Botswana aims to go beyond diamonds and attract local and international investors to explore and exploit other minerals such as metals and coal. This shift will reduce the country's heavy reliance on diamonds. Governments should use public policies to attract private mining investment and foreign capital for mineral development This study aims to identify opportunities and risks, provide evidence-based recommendations, and promote Botswana's mining sector as an attractive investment destination.
Keywords; geological potential, fiscal regime, Net Present Value, Internal Rate of Return (IRR), Average Effective Tax Rate (AETR), Marginal Effective Tax Rate (METR).