Friday, July 19, 2024

Parley finally “OKAYS” Norilsk’s out of court payment

Parliament has finally approved money amounting to USD 45 million (P430 million) as an out of court settlement to pay a Russian company, Norilsk Nickel Group.

This follows a lawsuit by Norilsk against BCL for walking away from a deal to buy its stake in a South African mine in 2016.

Initially the proposal was rejected by the Parliamentary Committee on Finance and Estimates after it raised a red flag over a Presidential Directive instructing government to pay Norilsk Nickel Group P430 million in an out of court settlement.

It is believed that the Botswana Democratic Party during its caucus agreed that there was mismanagement by management of BCL but agreed to bail out the company to avoid huge legal costs as the impending lawsuit boiled over.

Ministry of Finance and Economic Development has proposed that the request that was excluded from the supplementary Estimates of Expenditure from the consolidated and Development Funds contained in Financial Paper No. 2 of 2017/2018 relating to legal claims by the Norilsk Nickel group be approved.

When debating the motion, Member of Parliament for Selebi Phikwe Dithapelo Keorapetse described Paul Smith (the former Chief Executive of Minerals Development Company Botswana) as someone very dangerous to the economy of Botswana.

”This is the man who misled Ian Khama to the effect that the mine will never recover and requested for the closure of the mine, his role in the collapse of BCL mine is very reckless. He said if it wasn’t some reckless deals from BCL management and some stupid advice from Smith then BCL mine could not be closed. The closure came after the Russian Company issued some threats against government and the threats came as results of Smith,” said Keorapetse.

Keorapetse called on parliament to find a way to prosecute Smith because he has played a major role in the current appalling living conditions people of Phikwe find themselves and Batswana in general.

”My view is that we must look for that criminal so that he could be prosecuted. It doesn’t make sense to remove the smelter but rather it is better we do something because the price of copper has improved worldwide,” said Keorapetse.

Member of Parliament for Tati East, Guma Moyo said it is common knowledge that BCL has not been managed properly and asked for further investigations.

”We need to tighten our oversight institutions because the amount spent on BCL is not right but since we have nothing that we can do at this moment let just support the Minister to approve the request to pay for an out of court settlement but in future we should avoid this kind of situations,” said Moyo.

The proposal was for the Committee to ratify the expenditure as “Cabinet had approved the settlement of USD 45 million on the basis that there is value in avoiding a potential protracted and uncertain litigation process across multiple jurisdictions.”  Cabinet also believed that a settlement of disputes at this state will allow for the liquidation process in respect of BCL Group to progress in a more expedient manner as well as reducing the on-going cost to Government of funding the litigation as per Presidential Directive dated October 2017.

Initially Norilsk Nickel sought reimbursement to the tune of US$270 million (about P2,5 million) from the Botswana government over a botched deal by BCL to buy a 50-percent stake of its Nkomati Mine.

The Russian mining giant had served notice to sue on the Minister of Mineral Resources, Green Technology and Energy Security, Sadique Kebonang, and the Minister of Finance and Development Planning Kenneth Matambo and the Attorney General.

Norilsk Nickel announced on its website that it intended to sue the government of Botswana “in respect of its involvement in the reckless trading of BCL Limited and BCL Investments Proprietary Limited (together “BCL”), with a view of recovering $271 million plus damages and other costs that are owed to Norilsk Nickel in relation to the sale of a 50 percent interest in the Nkomati Mine in South Africa and $6.4 million that are owed to Norilsk Nickel in relation to the sale of the Tati Mine in Botswana. Botswana is the ultimate shareholder of BCL through its corporate vehicle MDCB.”


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