Sunday, June 16, 2024

Hundreds of miners left in the lurch as DML shuts down

Scores of Discovery Metal Limited employees were left jobless on Friday after the company’s financial lenders called the loan leaving the company unable to meet its financial obligations.
Last year the company retrenched 380 workers at its flagship Boseto mine before suspending mining and processing operations in July due to high mining costs set against softening international copper prices.
In an interview on Friday, DML Country Manager Mokwena Morulane, confirmed the unexpected closure of the mine in Toteng near Maun without prior notice. He stated that at least 400 employees were affected by the unexpected shut down.
He added that apart from the employees, some contractors were also affected by the latest development.
“The lenders called the loan saying they want their money with immediate effect. Because we were unable to pay all of it the board of the company resolved to go into voluntary administration of the mine,” he said.
He said the money that the lenders were demanding is in the region of US 110 million.
“The lenders have since secured the mine’s assets. The lenders exercised their rights and called the loan and as we speak the company is insolvent. We had to shut down because if we didn’t we would be trading as an insolvent company,” he said.
Morulane stated that they have since notified authorities at the Ministry of Minerals Energy and Water Resources and Commissioner of Labour about the closure of the mine.
Director of Mines in the Ministry of Minerals Energy and Water Resources, Gabotshwarege Thekiso said its mandatory that the ministry should be notified that the mine was shutting down. “I haven’t received correspondence from them but they might have communicated that to other authorities within the Ministry,” he said.
Botswana Mine Workers Union (BMWU) Secretary General Jack Tlhagale said they were shocked at the unexpected closure of the mine.
He said they learnt about the closure of the mine while they were at the site for a meeting with the management to discuss the planned underground mining operations that the mine management intended to introduce.
“They should have notified us and even the director of mines was not notified about this,” he said. Tlhagale is of the view that the company is outsourcing the operations of the mine to another company. He alleged that on their way to the site, they saw a considerable number of trucks of one of the companies travelling to the site of the mine.
According to Tlhagale, they intended to address the workers first before they could be addressed by the management of Discovery Metals but the police who had cordoned off the site would not let them in.
“They told us to leave the site or take the workers and go and address them at our offices. Despite our pleas that our offices are based in Selibe Phikwe they told us that the letters of termination of employment would be sent to the workers’ residential areas,” he said.
One of the workers told Sunday Standard that early in the morning on Friday when they were preparing to go to work they were shocked to find that the gate to the site of the mine was closed. He said security officers at gate who were accompanied by police officers told them that they should go back home.
Riddled by numerous challenges since commissioning in 2012, Boseto has been experiencing financial strain characterised by high debt coupled with the collapse of a few recapitalisation deals. Low ore grades recovered at Boseto has also exacerbated the company’s difficulties.
In June last year, Discovery reported that its cash operating costs were averaging $2.86 per pound. It also added that low demand for copper also contributed to its financial troubles.
Reports indicate that Boseto mine was expected to be mothballed by June this year, after a review of the open pit operations determined that the prevailing high strip ratio would result in a high operating cost environment, which was not sufficiently cash flow positive in light of the prevailing copper price.


Read this week's paper