Initially the British government had fully intended to hand the supervision of the Protectorate over to the government of the Cape Colony, but the Cape was unwilling to take on the responsibility and the potential expense.
In 1886, the Boers discovered large gold deposits in the Witwatersrand (around Johannesburg). The influx of money from this boosted the Boer farmers, who expanded their interests to the north, making a treaty with Khama’s enemy to the east, the powerful Lobengula. This in turn prompted the British to look beyond the Limpopo, and to back the territorial aspirations of a millionaire British businessman and prominent Cape Colony politician, Cecil Rhodes. By 1888 Rhodes, a partner in the De Beers consortium, had control of the lucrative diamond-mining industry in Kimberley, South Africa. He was hungry for power, and dreamt of linking the Cape to Cairo with land under British control.
Rhodes was fuelled by the belief that other areas of Africa had great mineral wealth and he wanted to colonise them and reap that wealth. In order to do so he formed the British South Africa Company (BSAC) in 1889. At that time, if companies or individuals could obtain concessions to African land from the owners, they were able to colonise it for the Crown. The British government expected that these concessions would be obtained honestly. However they were often gained fraudulently, by persuading illiterate African chiefs to sign (or put their mark on) documents which were presented to them as treaties, but which actually appropriated their lands.
The immediate reason for forming the BSAC was in order to colonise the land of the Amandabele and the Mashona (now Zimbabwe). In 1888 Rhodes’ men had obtained, by trickery, a treaty known as the Rudd Concession from the King of the Amandabele, Lobengula. This granted Rhodes all mineral rights on the king’s land. Although the king rejected the treaty when he discovered its real intention, Rhodes was nevertheless granted a royal charter by the British government.
The British also promised to transfer the Bechuanaland Protectorate to the BSAC, on condition that Rhodes first obtained the agreement of the Batswana rulers. Rhodes wanted the Protectorate, because he needed the right to build a railway across Bechuanaland. He further wanted to annex the Protectorate to Rhodesia (now Zimbabwe), and from there attack the Boer state of Transvaal from the north.
Rhodes and other British businessmen had stakes in the highly profitable gold mines at Witwatersrand (Johannesburg), but the state was controlled politically by the Boers. Rhodes wanted British rule in the Transvaal, to protect his profits from the gold mines.