Botswana will defer for one year the payment of a three percent royalty tax to support copper producers during a period of weak global demand and to avoid job losses, Minerals Minister Kitso Mokaila said Thursday.
Copper producers in Botswana include AIM-listed African Copper and Discovery Metals who operate Mowana and Boseto mines respectively. Until recently, the two companies were also listed on the Botswana Stock Exchange (BSE).
Mokaila explained that when deciding to defer the two companies’ royalty payments, government took into consideration the massive job losses that would result if the two companies were to totally close shop. However, the intervention seems to have come late for Boseto mine which has already laid-off employees and is now awaiting liquidation. Late last year, DML announced it had entered into an Exclusivity Period with Cupric over a potential sale of the mine, a deal that later collapsed.
The troubled Australian company had been having a tough time, with lenders and, as part of the talks with Cupric, it acquired a US$5 million short term working capital facility. Officially opened by President Ian Khama in 2012, the Boseto Copper Project was DML’s first producing copper mine and was brought on stream on time and within budget. The Project was designed to produce an average of approximately 36,000 tonnes of copper and 1.1 million ounces of silver per annum in concentrate from three million tonnes per year (3Mtpa) of ore feed to the concentrator.
On the other hand, African Copper has revealed that it will seek shareholder approval later in the month as it has decided to delist from the BSE and AIM. The miner, which owns Mowana and Thakadu mines in Botswana blamed lack of liquidity for its move to cancel the admission on the two bourses.
“The size of the company and the lack of liquidity in the market for the company’s shares have led the Directors to undertake a review of the merits or otherwise of the company continuing to be admitted to trading on AIM and the BSE,” the company said. “After careful consideration, the Directors have concluded that it is no longer in the interests of the Company to retain its admission on AIM and BSE and that a proposal to cancel the Admissions should be made to the Shareholders at the General Meeting.”
