Friday, October 23, 2020

Cash-strapped BCL is wallowing in P1b debt

Bamangwato Concession Limited (BCL) is staggering under a debt of approximately P1 billion (US$100 million), the mine’s metallurgist, Enock Mukosora, revealed this past week.

Giving President Ian Khama an update of the mine during a tour, Mukosora said the facility was struggling with subdued production as the prices had dropped in the past 12 months from as high as US$8 to around US$4.50 compared to normal operating costs of around US$7. He explained that the highest prices of copper/nickel the mine recorded was in the period between 2001 and 2002 when the prices went up to US$19.

Mine manager Modise Gaoetswe said mining expenses had significantly escalated because miners have to go deeper underground to extract the mineral ore. He said BCL was doing so in order to access ore from the two productive shafts. The deepest shaft is about 2km deep while other shaft was 1km deep. 

Gaoetswe said high costs of operations were also associated with the near-obsolete mine technologies still in use while on the other hand the company could not afford new technologies. More so, the option of converting themining model to open-cast was not economical as the mineral ore was too deep.

The Minister of Infrastructure, Science and Technology, Nonofo Molefhi, who accompanied Khama on the tour, said the government was working hard to bring around the mine to enable it to pay its debts. He also stated that Khama had assigned five Cabinet ministers to conduct a thorough study of the BCL business model designed to save the mine. 

Up to until a few months ago, BCL was a blue chip company that was on an upward trajectory ÔÇô buying mines in Botswana and across southern Africa and planning to diversify away from copper and nickel.

RELATED STORIES

Read this week's paper

Mochudi Center Chiefs ready for a season of change

It has been a year since Pay Your Stars (PYS) and Mochudi Center Chiefs (MCC) partnered to help the latter find financial...