Monday, February 26, 2024

Botswana not a lackey at Botash ÔÇô Minister

The Botswana government has reiterated that it remains an equal partner in its joint partnership with Chlor Alkali. Together the two partners run Botswana Ash.

A perception was created earlier this year that the government was a silent partner while Chlor Alkali was not only a technical partner but also held sway in key management decisions. This was after Ian Forbes, Botash chairman and also representative of the South African based Chlor Alkali, abruptly fired Mphathi who was the managing director of the salt company.

Aggrieved with the decision to fire him, Mphoto approached the ministry of Mineral Resources, Green Technology and Energy Security to intervene as Botash falls under its ambit. Indeed, Sadique Kebonang, formerly head of the ministry, sought to reverse the decision to fire Mphathi, only for Forbes to stand his ground.

Now out of cabinet, Kebonang on Monday at parliament sought clarity on the shareholders agreement, asking if it’s true that the government is denied a saying in the running of the company. Eric Molale, Kebonang’s successor, explained that the government is not a lackey in the agreement, further exposing that the agreement provides for equal voting rights between the Botswana government and Chlor Alkali.

“Both the shareholders have the right to appoint the same number of directors to the board,” he said.

“Additionally, all board resolutions including on appointments of Senior Executive Management positions require approval from a majority of Directors from each of the parties. It is not true that the Government is denied a say in the management of Botash.”

However Molale acknowledged that that procedures were flouted, laying the blame on government’s representatives in Botash board. “What appears was that a procedure had been in place. This could best be known by Honourable Kebonang,” said Molale, taking a jab at his predecessor.

In outlining the due process, the minister said board members ordinarily before a board meeting, must get direction and guidance from the shareholder and this did not take place.

Molale told parliament that all mining and accompanying sales agreements that exist between government and mining houses are periodically reviewed or re-negotiated as and when necessary, Botash included. “It is therefore our intention to re-negotiate the Botash agreement,” he said.

Molale is also set to lead the pack to negotiate a new sales agreement with De Beers when existing deal comes to an end in 2020. De Beers is majority owned by Anglo American Plc and the Botswana government which holds the remaining 15 percent. The diamond company is also the other half of Debswana, a joint venture with the government. Debswana operates four diamond mines in the country (Orapa, Letlhakane, Damtshaa and Jwaneng). Jwaneng mine is largest and most valuable mine in the world. Diamonds are the mainstay of Botswana’s economy since they were discovered shortly after the country gained independence. The partnership between the government and De Beers is one of the longest known public-private partnerships, stretching to 50 years.  The country is yet to diversify its economy away from its main export despite imminent threats in the diamond industry that includes competition from synthetic diamonds.


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