Thursday, October 22, 2020

Gov’t blew P638mln grant with reckless abandon at the expense of Phikwe – EU

The European Union this week confirmed that they entered into an agreement with the government in 2011 in a bid to help “save Selebi Phikwe” from the woes that could result from the closure of the BCL copper nickel mine.  

BCL, the oldest mine in the country, which is the life-blood of over 80 000 people in the township and the surrounding areas of Selebi Phikwe, went down on its knees two weeks ago following Government’s decision to place it under voluntary liquidation. 

Soon after the closure, details began to emerge on how government frustrated a plan by the European Union (EU) to ensure the survival of the mining town and surrounding villages.  

According to the EU office in Gaborone, part of the deal was over P600 million worth of projects sponsored through a grant. 

“A Memorandum of Understanding (MoU) between GOB and the European Union Delegation (EUD) governing the use of these funds was signed in January 2011. At the time of the signature of the MoU the REA re-employment account had around 638 million BWP to spend,” said the EU on Monday. 

Because of the EU support, two copper mines, BCL and Tati mines undertook further exploration and found additional resources of copper and nickel, which helped the mines to become sustainable. The two mines made repayments for the loans into the Sysmin Re-employment Account (REA). According to EU in Gaborone, in 2008, the government then asked that the loan be converted into a grant – a proposal that EU easily agreed to. 

It is said that after the signing of the agreement, the funding that was recuperated from the mines was put into that account to be used for the diversification of the economy of Selebi Phikwe. 

SPEDU, the regional economic diversification unit was then set up and given the mandate to spearhead some of the projects that were to help diversify the Selebi Phikwe economy from mining. 

Some of the projects, according to the EU include the Selebi Phikwe Technical College, the Botswana Mining Museum and Research Centre (BOMMERC), an Acid Capture Plant, tourism infrastructure at Letsibogo Dam and a packaging house and processing plant for horticulture produce.

“However, since 2011, some of the listed priority projects have been overtaken by events. For example, as long as the TVET colleges elsewhere in the country are utilized only to 40% it does not make sense to expand the college in Selebi-Phikwe further. With regard to the Acid Capture Plant, there was a pre-feasibility study for it in 2011, funded by the EIB. It concluded that there are not any bankable possibilities to go further with the project without a significant infrastructure investment from the Government. An Elemental sulphur plant, which was also looked into as an option, is linked with the mine still being in operation,” EU said Monday.

SPEDU was to use the REA account with the blessing of the Ministry of Investment, Trade and Industry (MITI), the National Authorizing Office (NAO) in the Ministry of Finance and Economic Development and the EUD in Botswana.

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