Wednesday, May 29, 2024

Russians cast aspersions on Botswana’s international investment accolades

The Chief Executive of Russian miner, Norilsk Nickel, Michael Marriott, has accused Botswana of undeservedly earning international accolades relating to investment and credit ratings.

As his company prepares to sue Botswana for P2 billion over a failed Nkomati Mine purchasing deal, Marriot says Botswana has over the years enjoyed reputation as one of the safest and best place to invest in the whole of Africa but “the way that the government of Botswana has acted over BCL brings the validity of that reputation into question”.

Marriott said that the Botswana displayed a complete disregard for the fair, frank and reasonable dealing with outsiders which BCL’s insolvent circumstances demanded. 

“It has failed to honour the obligations under the sale agreement concluded with Norilsk in October 2014,” says Marriot.

Norilsk Nickel last week served notice that it intends to commence legal proceedings against the Botswana government in respect of its involvement in the “reckless” trading of BCL Limited and BCL Investments Proprietary Limited. 

Through the lawsuit, Norilsk says it is trying to recoup $271 million-plus damages it says it is owed from the aborted sale of a 50 percent stake in the Nkomati Mine in South Africa. 

In October 2014, BCL Limited and Norilsk Nickel announced that they had entered into definitive transaction agreements to sell Norilsk operations in Africa to BCL, including a 50-percent participation interest in the Nkomati Nickel and Chrome Mine, South Africa, and its 85 percent stake in Tati Nickel Mining Company in Botswana. 

The Nkomati deal, announced by BCL a few years ago as a strategic priority as part of its high-profile “Polaris II” diversification and investment strategy, was designed to guarantee the long-term future of BCL’s operations by securing the supply of concentrate to its smelter in Selebi Phikwe.  The government was involved in or approved all material decisions relating to this transaction

Botswana was early this year ranked first in Africa and 12th in the world among mining jurisdictions in the 2016 Mining Policy Perception Index (PPI), which was contained in the Canadian based Fraser Institute’s Annual Survey of Mining Companies.

The Index, which is based on an annual global survey of 104 mining jurisdictions worldwide including sub-national jurisdictions in Canada, Australia, the United States, UK and Argentina, examines the extent to which government policies encourage or deter exploration and investment.

Meanwhile, Norilsk’s allegations on Botswana’s accolades comes hardly a few months after the World Bank published a report in which it called on Botswana to consider an initiative to improve transparency in the mining sector.

The report further states the need to create a forum to allow for ongoing dialogue between government, civil society and industry stakeholders.


Read this week's paper