Tuesday, May 18, 2021

BCL facing financial ruin

Government faces a difficult task of  bailing out BCL mine in Selibe Phikwe, Sunday Standard can confirm.

In an interview the BCL General Manager, Dan Mahupela said the Board of Directors will be meeting this week to determine what course of action to take.

He acknowledged the financial difficulties that BCL faces.

The company employs about 6000 people.

If Government does not bail out BCL, the company will not be able to pay its creditors. 

A bill in excess of P400 million is already overdue.

Mahupela attributed the troubles facing the company to a collapse in internartional prices.

He said the situation has not been helped by the long planned shutdown currently ongoing at the mine that is expected to cost in excess of a billion Pula.

While the current copper and nickel prices have collapsed to below $5 an ounce, Mahupela said BCL had  projections based on $10 an ounce that prevailed at the time.

“We are indeed financially constrained. Money this year has been significantly lower than anticipated,” said Mahupela.

With the smelter not operating as a result of refurbishments, he said the situation is all the worse.

His focus, he said is for him to now get the smelter back on line.

But first he has to raise P400 million, he said.

Banks have not been receptive, instead insisting on a guarantee from Botswana Government.

“Our intention was always to borrow against the smelter. But it is now not working because of planned shutdown,” he said.

He said the Board will have to come up with a decision on what to do.

Mahupela however said BCL staff will receive their end of month salaries.

Sunday Standard can confirm that creditors which include Botswana Power Corporation and Kentz Electrical, have not been paid their due invoices.

Kentz Electrical is undertaking a close to P1 billion plant refurbishment at BCL.

BCL problems started when the finance director took too long to interact with commercial banks for a much needed credit facility of P400 m.

Mahupela said the BCL crisis should be looked at from the context of what is happening to international metal prices.

“Only those companies with cash  reserves will survive the onslaught. BCL does not have cash reserves,” he said.

BCL reserves were severely dented when the mine passed P1 billion cash to Botswana Government which is the sole owner of the company.

On what he will do with BCL finance executives that slept on the job, Mahupela said he is for now seized with saving BCL.

“I can’t download finance team when we have a finance situation. I need them to resolve the crisis,” he said.

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