The High Court of Botswana has delivered a landmark ruling in favor of Gcwihaba Resources, a subsidiary of Canadian mining company Tsodilo Resources, in a dispute over the renewal of its prospecting license for the Xaudum Iron Formation (XIF) project.
The court ordered the Minister of Minerals and Energy to renew the license and to align the effective dates of contiguous licenses with that of the renewed license within 14 days.
The ruling is a significant victory for Tsodilo Resources, which has been exploring the XIF project since 2010 and has defined an inferred mineral resource estimate of 441 million tonnes, with an average grade of 29.4% iron.
The company had applied for the renewal of its prospecting license in 2021, but the Minister informed it that a part of the area included in the license was in a buffer zone surrounding the Okavango Delta, a UNESCO World Heritage Site and one of Africa’s largest and most biodiverse wetlands.
The Minister said that any prospecting activities in that area would be subject to environmental assessment measures, and asked the company to revise its renewal application and reduce the buffer zone area of the license block.
The company complied with the request and submitted a revised application, but received no response from the Minister for several months. It then decided to take legal action and filed a petition to the High Court, seeking an order to compel the Minister to renew the license.
The High Court ruled that the Minister had acted unlawfully and unreasonably by failing to renew the license within the prescribed time frame, and by imposing additional conditions that were not supported by any law or policy.
The court also found that the Minister had violated the company’s legitimate expectations and its right to a fair administrative action, as guaranteed by the Constitution of Botswana.
The court noted that the company had invested substantial resources and time in exploring the XIF project and that the delay and uncertainty caused by the Minister’s actions had jeopardized its prospects of developing a viable iron ore mine in Botswana.
The court further observed that the XIF project had the potential to contribute significantly to the economic development and diversification of Botswana, which is heavily dependent on diamond mining.
The court concluded that the company was entitled to the renewal of its license and the alignment of the contiguous licenses, and ordered the Minister to comply with its decision within 14 days.
The ruling has been welcomed by Tsodilo Resources, which said that it reaffirmed Botswana’s reputation as one of the best democracies in the world, with respect for the rule of law, judicial independence, and separation of powers.
The company said that it was looking forward to resuming its exploration activities at the XIF project, and to advancing the development of a sustainable, clean-energy iron ore mine that would benefit the people of Botswana and the region.
The ruling has also been hailed by the Botswana Chamber of Mines, which said that it demonstrated the strength and integrity of Botswana’s legal system and the protection of investors’ rights and interests.
The chamber said that the ruling would boost the confidence and attractiveness of Botswana’s mining sector, which has been facing challenges due to the COVID-19 pandemic, the global transition away from coal, and the volatility of commodity prices.
The ruling comes at a time when Botswana is seeking to diversify its mining portfolio and increase its production of other minerals, such as copper, nickel, and coal bed methane.
The country is also exploring the potential of renewable energy sources, such as solar and wind, to reduce its dependence on imported electricity and to meet its climate change commitments.
The ruling is expected to set a precedent for other mining companies operating in Botswana and to encourage more investment and exploration in the country’s rich and diverse mineral resources.
Source: Mining Weekly
