Saturday, October 24, 2020

Pressure mounts on BCL management as Minister hints at dismissal

Top executives at trouble ridden BCL mine could be given their marching orders anytime soon, according to Minister of Minerals, Energy and Water Resources Kitso Mokaila. BCL management’s problems took a turn for the worst on Friday after Mokaila hinted to parliament that their future hangs in the balance as he was considering showing them the exit door.

When responding to a question from Selebi Phikwe West Member of Parliament (MP), Dithapelo Keorapetse during parliament question time, Mokaila described BCL management as “slow” and fell short of calling them “useless.”

“The management is not serious. They were too slow in doing certain things,” said Mokaila.

Keorapetse had asked the Minister to explain the way forward for the troubled copper mining and smelting company and its employees, who are reportedly living in fear of losing their jobs. Plummeting commodity prices have plunged BCL into a serious cash flow crisis, as the state owned copper miner has been facing a serious cash flow problem that rendered it unable to pay creditors and staff salaries. BCL’s woes worsened recently after government refused to grant it yet another bail out. The mine’s management recently went to the government enclave with cap in hand, seeking a P1.5 billion equity injection to pay off debtors and finance operations. But government refused to grant the bailout, instead ordering BCL management to float a bond in the financial markets. The refusal to bail out BCL, together with Mokaila’s recent jabs lend credence to suggestions that government has lost faith in BCL management, led by Dan Mahupela.

Sunday Standard is informed that the collapse of global commodity prices is not the only reason behind BCL’s woes, as pundits have also opined that BCL is near collapse because of internal governance lapses on the part of its management. Insiders have revealed that BCL’s troubles started when management decided to divert funds that were meant for operations towards fixing the smelter, the most significant component of the mine’s operations.

The awarding of the smelter shut down tender to South African company Kentz SA, which has a chequered history in Botswana, caused uproar as citizen owned engineering companies questioned why they were overlooked in the multi-million Pula project. On Friday, Mokaila told parliament that the smelter shutdown cost a total P749 million. He also revealed that the project took 112 days instead of the initially planned 62 days. 

Still on Friday, Keorapetse asked Mokaila if he was aware that the smelter was not fully functional as there were reports of pipe leakages, to which the Minister replied: “That’s news to me.”

Mokaila has previously admitted that BCL has both cash flow and profitability problems.

“We hope that in two years time prices will come up again. In the meantime we will have to ask the Minister of Finance to guarantee loans that BCL would want to take,” Mokaila said late December 2015.

Meanwhile, BCL insiders have revealed that the mine’s board recently refused to approve budget proposals for 2016, questioning some inconsistencies in the figures. Instead, the board approved a three month budget and sent management back to the drawing board to correct the highlighted inconsistencies. On Friday, area Member of Parliament Dithapelo Keorapetse piled more pressure on BCL management, saying: “Those who got the mine into the current mess through improper financial planning and imprudence should be held accountable. If need be, they must be fired.” BCL is 100 percent owned by the government of Botswana.

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