Sunday, June 16, 2024

BCL closure will never be possible to justify

Since the closure of BCL, government as the shareholder has been trying to stay ahead of the debate curve; with very little success.

The recent statement by finance minister that government is not responsible for employment creation is part of that effort.

Botswana Government is still struggling to explain the reasons why BCL mine was closed.

The recent announcement that some investors from the United Arab Emirates might be interested in buying BCL will put paid all the reasons that Government had provided which was that BCL no longer made a business case.

BCL closure, at least for now seems to have been a tactical decision by Government to circumvent its obligations with the Norilsk, a Russian mining house from which Botswana Government purchased BCL a few years ago.

Liquidation, it is now clear was a hapless technicality by our Government to dishonor its financial obligations.

Re-opening a mine after closure is always more difficult than starting a new mine from scratch.

In fact this does not only apply to reopening a mine, but to restarting a business after closing it for whatever reason.

It was always clear that BCL was going through a rough patch.

A P1 billion lifeboat from the Government was never going to be enough given the problems that BCL was going through, chiefly high payments to repair and renew the smelter, which by the way is the backbone of BCL.

The bulk of that money went towards paying contractors that were carrying out the refurbishment of the smelter, leaving open the other requirements of the company’s daily operations.

In a different time, just getting smelter running would have been enough to put BCL on course to making money.

But not now.

Commodity prices have been depressed for a few years now.

And at the instance of Government, BCL, unlike its peers across the globe has not been able to accrue cash as a war chest to be hedged against ongoing slump.

Unwisely, Government thought by placing the mine on liquidation it would save itself the costs.

In the end costs have skyrocketed, tragically also including human life.

Our view is that the Government of Botswana should not have closed the mine.

Instead efforts should have been put in place to seek new owners or new investors, while a parallel process to engage creditors was in motion.

What the Government did, by closing the mine based on a lie is akin to abuse of trust that the nation had placed on those in power.

Closing the mine was irresponsible and ill-advised.

It was a decision based not even on serving the business interest of the shareholders however narrow, but rather simply lying to the unsuspecting public.

As we speak, people’s lives have been destroyed ÔÇô some of them irreparably.

Because of a lie, some people have paid the ultimate price ÔÇô with their lives.

Most tragic is the fact that lives, almost all through suicide all as a result of this lie that BCL had no business case.

What Botswana government did to employees of BCL was callous and with all new developments, it becomes more and more unpardonable.

To many former BCL mine employees, it does not matter whether or not the mine reopens.

Its closure, under such flimsy reasons means that their lives will never be the same again.

These are the people who have lost all their live earnings, including medical insurance.

These are the people whose dignity has overnight been taken away.

These are the people who the opening of the mine will by itself not bring back their lives.

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