Tuesday, September 22, 2020

BCL Mine could get new owners in December

In four months’ time, the defunct BCL mines might get new owners, ending a 4-year nasty chapter after the mines were shuttered overnight and placed on liquidation that was marred by high drama.

Lefoko Moagi, minister of Mineral Resources, Green Technology and Energy Security, on Monday told parliament that the government has identified three possible investors who are interested in bringing the mines back to life. The process of choosing new owners is expected to be completed by December.

Faced with the dwindling commodity prices, and rising operating costs, the cash-strapped Botswana government made an abrupt decision  to close BCL Group, made of BCL limited and Tati Nickel Mining Company, in a provisional liquidation by order of the High Court of Botswana on 9 October 2016. The government owns 100 percent of shares in BCL, and BCL’s wholly owned subsidiary, BCL Investments Pty Ltd, holds an 85 percent stake in Tati. The remainder of the shares in Tati are directly held by the Botswana government.

The liquidation process was later marred a fallout between former minerals minister Eric Molale and Nigel Dixon-Warren, the court appointed liquidator. Relations were strained in early 2018 when both parties clashed on the duration of the liquidation process, with the government piling pressure on Dixon-Warren to come up with a definite date on the winding up of BCL assets. However, the liquidator said it was a complicated process that could take up to seven years to conclude.

This did not go down well with the government which was facing criticism from other quarters as to why it has been spending huge amounts of money on the liquidation process while also the major creditor. Since 2016, government spent over P1.1 billion towards BCL, with a larger proportion of the funds paying former employees’ benefits, and the rest towards the care and maintenance of the mines.

By late 2018, relations between Molale and Dixon-Warren had deteriorated following a series of disagreements. The most glaring was the decision by the liquidator to axe half of the care and maintenance staff that were retained during the liquidation process. This happened after Molale had told parliament that he had spoken to Dixon-Warren and pressed upon him that he should not retrench any staff.

In December 2018, Molale told parliament that relations between him and the liquidator have irretrievably broken down. Molale disclosed that he had kick-started the process to have BCL removed from liquidation and put under judicial management to give the government more leeway in what to do with BCL rather than deferring to the liquidator, who under the liquidation process, can only be removed by Registrar and Master of High Court in terms of the Companies Act.

Dixon-Warren later resigned as BCL’s liquidator in May 2019. The registrar of the High Court later appointed South Africa based firm Sanek Trust Services as BCL’s new liquidator.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.