Botswana is the most established mining jurisdiction in Southern Africa outside South Africa, and its framework reflects that. The Mines and Minerals Act No. 17 of 1999 sets out a licence ladder that is longer, more generous on tenure, and more predictable than most of the region.
The headline terms tell you a lot. A mining licence runs for up to 25 years and renews for up to 25 more. Government has an option to take up to 15 percent working interest when the licence is granted, and, unlike some jurisdictions, it contributes its share of the costs. That is a fundamentally investable structure.
Licensing is administered by the Department of Mines in the Ministry of Minerals and Energy, which also houses the Department of Energy, the Mineral Affairs Division and the Diamond Hub.
Insika assesses mining and quarry opportunities in Botswana, maps the licence pathway, coordinates the technical and environmental work, and prepares projects for investors and for the Department.
The licence ladder, and how long each rung lasts
Botswana runs four instruments. Knowing which one you need, and how long it buys you, is the first decision.
- Prospecting licence. Valid for the period applied for, not exceeding three years (section 17(1)). You are entitled to no more than two renewals, each not exceeding two years (section 17(3)), so seven years in total on the standard path. Renewal must be applied for not later than three months before expiry, on Form I of the First Schedule, with a report on operations and costs so far and a programme for the renewal period.
- Retention licence. Valid for up to three years and renewable once only for up to three more (section 30). This is the instrument for a deposit you have found but cannot yet mine economically, and it is one of the more useful features of the Botswana regime. It cannot be granted over an area larger than would be required to carry on mining operations on that deposit (section 27(4)).
- Mining licence. Valid for such period, not exceeding 25 years, as is reasonably required to carry out the mining programme (section 42(1)). Renewal must be applied for not later than one year before expiry, on Form V, and the renewal period may again run up to 25 years.
- Minerals permit. The lighter instrument for small scale operations.
What the Minister tests on a prospecting application
An application for a prospecting licence must set out a description of the area with a plan, the mineral you wish to prospect for, the period required, a proposed programme of prospecting operations with its estimated cost, and proposals regarding the employment and training of citizens of Botswana.
The Minister grants the licence if satisfied the applicant has, or has secured access to, adequate financial resources, technical competence and experience to carry on effective prospecting operations.
Two points follow. First, the citizen employment and training proposal is not a formality appended at the end. It is part of what you are applying with, and a serious proposal is a differentiator. Second, "has secured access to" is deliberately wider than "has": a junior explorer with committed funding behind it can qualify, but the commitment needs to be evidenced.
If you discover a mineral not covered by your licence, section 18 lets you apply to amend the licence to include it, specifying the mineral, the circumstances of the discovery, and a programme of prospecting operations for it.
Moving from prospecting to mining
The step up to a mining licence is where projects are made or lost, and Botswana is specific about what it wants to see.
- Hold a prospecting licence from the Department of Mines.
- Complete a bankable feasibility study on mining and processing the deposit discovered. Not a scoping study, not a preliminary economic assessment. Supplying that sector, rather than mining yourself, runs through public and state-linked procurement.
- Obtain surface rights from the land authority or land owner, with a stamped sketch plan showing coordinates. In Botswana much land is tribal land administered by Land Boards, so this is a real workstream rather than a formality.
- Have established domicilium citandi et executandi in Botswana, meaning a proper address for legal service in the country.
- Be incorporated under the Companies Act and carry on the business of mining under the licence.
- Not be in liquidation or under judicial management, except as part of a reconstruction scheme.
- Have no disqualified directors or shareholders.
The surface rights requirement is the one that most often surprises foreign applicants. A mineral right is not a right to the surface, and on tribal land the Land Board is a separate counterparty with its own process and timeline. Where a prospecting or retention licence is granted over land in a tribal area, one half of any money received is appropriated to the Land Board for that area, which tells you how seriously the Act treats that relationship.
Royalties and the Government working interest
Two state entitlements apply, and they work very differently from each other.
| Entitlement | Rate or terms | Section |
|---|---|---|
| Royalty, precious stones | 10% of gross market value | s66(2) |
| Royalty, precious metals | 5% of gross market value | s66(2) |
| Royalty, other minerals and mineral products | 3% of gross market value | s66(2) |
| Government working interest, non-diamond | Option of up to 15%, Government contributing its share of costs | s40 |
| Government participation, diamonds | Negotiated and codified in the mining agreement | s41, s51 |
| Tribal land, prospecting and retention | Half of money received appropriated to the Land Board | Act |
How the Government working interest actually operates
This deserves its own explanation, because it is often described loosely and the detail is favourable.
Under section 40(1), on the issue of a mining licence Government has the option of acquiring up to 15 percent working interest participation in the proposed mine. If it exercises that option:
- Government is issued a single P1.00 special share at par, which carries the right to appoint up to two directors, with alternates, and to receive all dividends and other distributions in respect of its working interest percentage.
- Government is obliged, in the same manner as other shareholders, to contribute its working interest percentage of costs. That covers all audited arms-length expenditure directly attributable to acquiring the licence, including relevant prospecting expenditure, and all expenditure on the mine incurred after the licence is issued.
Under section 40(2), Government must tell the applicant at the point of issuing the licence whether it is exercising the option and what percentage it wants. You are not left waiting to find out.
That combination, a capped percentage, a contributing partner, and certainty at licence issue, is a materially more investable structure than a free-carried interest. It is worth understanding well enough to explain to a funder, because it changes the equity story.
For comparison, and this is the kind of question a regional investor asks: Lesotho's Mines and Minerals Act 2005 provides that Government may acquire not less than 20 percent shareholding in a proposed mine, with no equivalent cost-contribution mechanism in the same terms. The two regimes are not interchangeable, and a model built for one will misprice the other.
Diamonds are handled separately. A licence to mine diamonds has annexed to it a copy of an agreement reached under section 51, and the extent and terms of Government participation are agreed there rather than capped at 15 percent.
The sequence that works
Order matters. Surface rights and environmental approval both run on other people's timelines.
- Opportunity and ground check
The mineral, the location, and whether the ground is held. Establish the land tenure position early, because tribal land brings the Land Board in as a counterparty.
- Prospecting licence application
Area description and plan, mineral, period, programme with estimated costs, and proposals for the employment and training of Botswana citizens. Evidence of financial resources and technical competence.
- Prospecting programme
Up to three years, with two renewals of up to two years available, and a discretionary extension where a discovery needs more evaluation.
- Retention licence, if needed
Where the deposit is real but not yet economic. Up to three years, renewable once.
- Bankable feasibility study
Required for the mining licence, so scope it to that standard from the outset rather than upgrading a lesser study later.
- Surface rights and Land Board
From the land authority or owner, with a stamped sketch plan showing coordinates.
- Environmental authorisation
Through the Department of Environmental Affairs under the Environmental Assessment Act 2011. See environmental compliance.
- Mining licence and Government election
Application with the corporate requirements satisfied. Government states its working interest election on issue.
What Insika does on a Botswana mining project
Insika is a consulting and project development firm, and a mining project runs through the same staged method set out on our project development page. The Minister and the Department of Mines decide applications. Our role is that the project reaching them is complete, correctly sequenced and commercially sound.
- Project assessment. Mineral, location, stage, business model and the licence route that fits.
- Application preparation. Including the citizen employment and training proposals, which are part of the application rather than an afterthought.
- Land and surface rights. Engagement with the land authority or Land Board, run in parallel rather than after the fact.
- Feasibility coordination. Scoped to a bankable standard because that is what the mining licence requires.
- Environmental coordination. Through the Department of Environmental Affairs.
- Investment readiness. Financial models carrying the correct royalty rate and the Government working interest as it actually operates.
- Rehabilitation and closure planning. Costed from the start.
Official sources
This guide is based on the current rules published by the relevant Botswana authorities. Always confirm the latest fees and requirements with the office that applies to you.