Pula Steel Manufacturing and Casting has been hailed as one of the companies that will help revive Selibe-Phikwe by stimulating economic activity and employment creation, amid fears that the mining town will soon denigrate into a ghost town. This was said by Vice President Mokgweetsi Masisi during the launch of the first phase of the plant last week in Selibe Phikwe.
Pula Steel deals in the processing of scrap metals into billet and different types of steel products. BCL is the major shareholder in the company, with 50.5 percent shareholding. The other shareholders are CEDA, Verma family and Wealth Generation.
Masisi said the project will create employment for the people of Selibe Phikwe and the SPEDU region.
“The establishment of Pula Steel has also created opportunities for others to consider investing in potential downstream projects such as production of nuts and bolts, screws and nails just to mention a few,” said Masisi.
He said steel is a basic commodity which is required by any developing economy for infrastructural developments, mines and construction.
According to international trade statistics SADC imported P36 billion worth of steel in 2014, while local demand amounts to P775 million. Local demand was met primarily by South Africa and China which supplied 50 percent and 40 percent respectively.
“Many may know that SPEDU was established to prepare Selibe Phikwe for life after BCL. However because of the innovative thinking of the BCL leadership, the two entities will work together to grow the SPEDU region into an industrial and minerals processing centre,” he said.
Masisi further said Pula Steel is well placed to benefit from the Economic Stimulus Package(ESP) that government has proposed, provided its products meet the required standards and prices are competitive. Also pursuant of the EDD, government has enacted a law which restricts export of scrap metal without satisfying local foundries first.
For his part, BCL Managing Director, Dan Mahupela said the establishment of Pula Steel lies within BCL ‘s corporate strategy ÔÇôPolaris II, which seeks to expand the mining house’s portfolio by leveraging on the company’s technical capacity in mineral extraction and processing built over 45 years.
“This strategy not only aims at growing the BCL business capacity, but will also benefit the town of Selibe Phikwe and the SPEDU region at large. As a company we are fully aware of the abundance of scrap metal in Botswana which has been exported out of the country at high volumes but low value to Botswana. We are also aware that Botswana has abundant iron ore deposits and coal reserves covering more than half of the country,” he said.
Mahupela said steel is a basic commodity which is required by any developing economy, mainly for infrastructure developments. He added that steel is in short supply because of increased economic activity and development projects in the SADC region.
“According to the initial plan, this plant would have been constructed with an opening production capacity of 80 tonnes of billet per day. However there was change of scope during project implementation which included variation in the intended output of 80 tonnes of billet to 240 tonnes of billet per day. As a result some elements were brought forward and affected a number of components and processes of the plant such as a major modification in the power configuration from the initial 5.5MVA to 15 MVA,” Mahupela said.
He also added that bringing forward some elements, also stretched the initial target commercial date from December 2014 to October 2015. He said the change in the approach to deliver the project led to an increased capital required of P130 million against the P40 million initially planned. He also revealed that the BCL Board of Directors approved an additional investment of up to P53 million early this year as a result of the change in the scope to ensure that the project is delivered.
The plant will employ 250 employees in its first phase and it is expected to employ 1000 employee in the second phase.