Friday, December 4, 2020

If BCL fails to get a buyer, it will shut down

The mothballed BCL mines continue to cost government money, while still holding on the hopes that any of the interested investors will buy the copper and nickel mines before this year ends, and should the mines fail to get a buyer, government has hinted at completely shutting down the mines.

Faced with the dwindling commodity prices, and rising operating costs, the government overnight abruptly closed the BCL Group, made of BCL limited and Tati Nickel Mining Company, in a provisional liquidation by order of the High Court of Botswana on 9 October 2016. The government owns 100 percent of shares in BCL, and BCL’s wholly owned subsidiary, BCL Investments Pty Ltd, holds an 85 percent stake in Tati. The remainder of the shares in Tati are directly held by the Botswana government.

Lefoko Moagi, minister of Mineral Resources, Green Technology and Energy Security, on Friday told parliament that  government spent P1.2 billion on the closed mines between 2016 and 2018, and last year injected another P292 million, with the bulk of funds geared towards the maintenance and care of the mines. He said three indicative offers have been received from potential buyers, with the process of selecting the winning bid to conclude before end of 2020.

The winning bidder will be expected to carry out due diligence and at the end of it may opt not to invest, leaving the government with the costly defunct mines.

“The liquidator will decide together with government on what to do with the assets, including ceasing of care and maintenance paving way for for rehabilitation,” Moagi said. Mining rehabilitation is the process of repairing damage done by mining activities, thus making the site to be safe and stable. It is the final step in closing down a mine for good.

The liquidation of BCL has been marred in controversy, with government criticised for its abrupt decision to close the mines, and yet continuing to pump millions in a liquidation process that does not seem to have an end in sight. The process of disposing the mines faced complications along the way, with the glaring one being the  fallout between former minerals minister Eric Molale and Nigel Dixon-Warren, the court appointed liquidator in 2017.

Relations were strained in early 2018 when both parties clashed on the duration of the liquidation process the government piling pressure on Dixon-Warren to come up with a definite date on the winding up of BCL assets. However, the liquidator said it was a complicated process that could take up to seven years to conclude. Furthermore, relations between Molale and Dixon-Warren deteriorated following a series of disagreements, in particular, the decision by the liquidator to axe half of the care and maintenance staff that were retained during the liquidation process. This happened after Molale had told parliament that he had spoken to Dixon-Warren and pressed upon him that he should not retrench any staff.

In December 2018, Molale told parliament that relations between him and the liquidator have irretrievably broken down. Molale disclosed that he had kick-started the process to have BCL removed from liquidation and put under judicial management to give the government more leeway in what to do with BCL rather than deferring to the liquidator, who under the liquidation process, can only be removed by Registrar and Master of High Court in terms of the Companies Act.

Dixon-Warren later resigned as BCL’s liquidator in July 2019. The registrar of the High Court later appointed Trevor Glaum of the South African based Sanek Trust Services as BCL’s new liquidator after local companies shunned the expression of interest to offer liquidation services.

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The Telegraph December 2

Digital edition of The Telegraph, December 2, 2020.