The Botswana government has been slammed for its deafening silence over the collapse of Norilsk Nickel Botswana Metal Refineries Activox project.
Apart from a short communiqu├® released after Norilsk announced the shelving of the Activox project, the government has so far not made any comments on subsequent developments despite repeated calls by affected members of staff and civic and community leaders.
At a meeting between BMR management and staff in Francistown last week, it became obvious that people were becoming irritated by government’s continued silence, especially as there are mounting suspicions that the Botswana government is being fleeced out of a profitable business opportunity. Suggestions were made that Norilsk had bullied government into endorsing the decision to shelve the project and government was adopting a mum stance to save itself from the embarrassment of answering a plethora of questions from irate Batswana.
The Sunday Standard investigations have also revealed that a storm is brewing in nearby Matsiloje, Matshelagabedi and other affected villages whose residents were coerced to relocate and cede their lands to the mining project. “We were cheated into surrendering our land to these people with promises that our children will be employed. Today they have disappeared, our land is barren and degraded and our children are back at home,” said one of the irate villagers.
It also emerged that while government officials and the project sponsors had, in the past, literally camped in the affected villages asking for land, not one person has come to address the villagers after the project collapsed.
Kgosi Moipolai Seleka of Matsiloje said on Friday that no one has contacted them to explain the collapse of the project and whether their land will be returned to them.
“We are still in shock over this whole issue and we hope someone will come and explain to us what really happened,” he said.
By Friday, the Ministry of Minerals Energy and Water Resources could not answer questions fielded to them by The Sunday Standard.
BMR General Manager, Wayne Venter, and Operations Manager, Robert Wegner, last week secretly addressed employees in what transpired to be a heated meeting in Adansonia Hotel in Francistown. Management told the employees what they already knew, that they had exhausted all alternatives that they could pursue to save the sinking company, and that retrenchment was a certainty.
“As we have indicated before, it does not make economic sense to continue with the project, especially due to escalating costs in the project and existing market conditions,” said Wegner.
Norilsk Nickel, the world’s largest nickel miner, saw its profits for the first half of 2008 dropping by over a third due to escalating inflation in Russia and a gradual decline (40%) in the price of metals, which saw the trendsetting mining giant’s stock plummeting to an all-time low.
Base metal prices have generally been on the decline in the last few months. The situation was not helped by the recession in the United States, which eventually spilled into Europe and culminated in a worldwide recession threat thus painting a gloomy international demand outlook.
The reduction in the price of the base metal prices was also worsened by the increasing strength of the US dollar against the euro and a basket of other currencies. A strong US dollar makes commodities which are denominated in other currencies very expensive for buyers who are holding other currencies.
Norilsk was forced to write off US $ 2 billion on the value of its Lion Ore acquisition partly due to the collapse of the Activox project at the BMR plant, which was shelved due to cost escalations. However, indications are that demand is expected to peak, though not to the dizzy heights that it has reached in the past, mainly because of the increase in demand from China, the largest metal user.
However, disagreements emerged when it became evident that management was not willing to let the employees go yet as “a concrete announcement will be made within the next three weeks”. Employees on the other hand feel that they should be offered a blanket voluntary package so that they can seek employment elsewhere. But management is looking to retain a certain number of employees to take the company forward and will not risk losing some of their favoured employees as they can opt for the voluntary exit package.
Wegner, however, said that any employee who wants to exit the company should contact management personally. Members of staff, however, did not take kindly to this as they felt it would lead to some kind of intimidation and victimization. “It is not reasonable to address us on an individual basis when we are all faced with the same problem. We feel that management should offer us the same package because this is an issue that affects all of us,” said one staff member.
Many of the employees questioned why government officials have never come to address them. But the operations manager said that government, as a shareholder in the project, is part of the decision making process.
The Activox project was lauded as one of Botswana’s trump card mineral beneficiation initiatives. During the ground breaking ceremony none other than former President Festus Mogae landed his chopper right at the BMR plant while scores of cabinet ministers civil and political leaders and the who is who of Botswana’s business community wined and dined to launch the P4 billion project which would apparently make Botswana the leading nickel province in Africa.
The investment in the Activox project would have represented a 3% contribution to Botswana’s GDP and a 2.5% increase in export earnings.
But all the pomp has dissipated and all what remains is doom and gloom. After last week’s meeting, workers walked around listlessly, many of them having given up hope and regarding themselves as unemployed and almost all of them not willing to go back to work.
The fact is that the Activox era ended even before it started. Workers say that the most saddening thing though is government’s deafening silence. They say that they want to be consulted, not by the managers, but by their own kith and kin because they are on the same wavelength. The villagers want explanations. They feel betrayed because the very same people who pampered and lavished them with attention have disappeared into thin air.
But government remains mum…. and the silence is deafening.