Wednesday, May 22, 2024

Government sets up task force to study BCL business model

The Botswana government has set up a cabinet task force of five ministers to study the business model and operations of the embattled BCL in order to decide on whether to fund, place the mine on care and maintenance or shut down operations completely. 

The minister of Minerals, Energy and Water Resources Kitso Mokaila said his ministry advised the cabinet that after a thorough studying of the miner’s operations and business model; only three options were left to resolve the problems at the mine.

“We approached cabinet concerning BCL against the background of record low nickel prices worldwide. We advised cabinet that there were three options left that needed utmost attention because they will not be easy decisions. Should government re-invest in BCL? How much would be injected into the mine, and what would this means to other parts of the economy? The second option was to place the mine on care and maintenance. Lastly, we could shut down the mine and then assess what impact that could have on BCLbusiness partners and employees,” he said.

He said the government, which under-wrote a $100-million credit facility to save the company from collapse three months ago, could no longer afford to fund BCL as readily as it did in the past because of the struggling economy.

“In the past, when we had a sound economy, we could have simply considered the cash injection option with hopes of making decent returns. But now, any decisions made on one part of the economy can adversely affect the other critical parts. We will decide on what to do with BCL shortly, and an announcement will be made,” Mokaila said.

BCL has also been hit by a series of mine accidents which analysts fear could negate the company’s chances of attracting the prospective investors to bail it out. Four workers died and eight were seriously injured in three separate incidents in May and June. The incidents involved a collapsed ore face and two transporter cages which malfunctioned while hauling workers between the surface and underground working stations.


Read this week's paper