Friday, September 22, 2023

Who will save Mowana mine?


One after another, foreign copper miners come and before anyone knows they are gone. This has been the case at the Mowana copper mine located near Mosetse and Dukwi villages, some western side of the City of Francistown.

As things stands, the mine is currently under judicial management and is likely to shut down again. Discussions on restructuring of Leboam Holdings, a company that operates the mine are currently ongoing between creditors.

The minister responsible for minerals ÔÇô Eric Molale says should these discussions collapse, the company will be placed under liquidation. This means the company employees who are owed salaries, like other creditors can only get their share of proceeds if any have been realized once the liquidation process is complete.

Leboam is reported to have gone into financial difficulties and is unable to pay its debts, which included employee salaries. Subsequently on December 18th 2018, the company was placed under judicial management.


Leobam Holdings operated the copper producer Mowana Mine from April 2017 until December 2018 after it revived it from yet another liquidation dating back to 2015.

Messina Copper Botswana (Pty) Ltd the previous holder of the mining license for Mowana Mine was placed under provisional liquidation in November 2015, with the final liquidation order granted on 15 December 2015. On 16 January 2017, the High Court ordered that the mining licence for Mowana Mine as well other mineral concessions held by ‘Messina Copper Botswana (Pty) Ltd in Liquidation’ be transferred to Leboam Holdings (Pty) Ltd. The licenses were transferred.

Following the suspension of its operations at Mowana Mine mid October 2015, the mining contractor, Diesel Power Limited then approached the High Court to have Messina Copper (Botswana), a subsidiary of African Copper liquidated. The previous owner, Messina Copper (Botswana) then suspended operations at the Mine, putting close to 400 workers on paid leave and ultimately axing them.

Sometime in March this year, a local newspaper – Mmegi reported on a revealing report into the troubled copper mine’s state, that showed that by the time it closed on December 18 last year, Mowana owed the taxman P13 million in unpaid VAT and PAYE obligations.

From January 2017, the company deducted pay as you earn (PAYE) worth about P6 million from its 450 or so workers, but did not pass it along to the Botswana Unified Revenue Service (BURS). Workers were also owed a collective P7.2 million for unpaid salaries dating back to October 2018, as well as historical bonuses.

The report, produced after a preliminary assessment by Mowana Mine’s provisional judicial manager, John Hinchliffe paints a picture of widespread cutting of corners by managers, who played fast and loose with accounting policies in order to keep the operation going at all costs.

Molale this week told Parliament that one of the largest creditors of Leboam Holdings, Fujax Minerals and Energy Limited, undertook to pay some of the costs of the Judicial Management with the hope to restructure the company’s debt and return the company to solvency. Funds advanced by the creditor he said were used to pay Leboam staff on paid leave until end of February 2019 as well as those on active duty as part of the care and maintenance and security teams were paid up until June 2019.

Meanwhile Nata- Gweta area Legislator Paulson Majaga, who had queried on the mines’ status update on employees’ salary payments from Molale, also highlighted to Parliament that some of the workers have left Dukwi and Mosetse without paying their rentals. However, Molale showed no knowledge to that effect.


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