Tuesday, May 18, 2021

Work begins at BCL as potential buyer carries due diligence

The fate of the mothballed BCL mines will be known at the end of August as the potential buyer begins its due diligence.

On Monday, the Chief Registrar of the High Court Michael Motlhabi revealed that a memorandum of understanding with Premium Nickel Resources Corporation has been finalized, paving way for the Canadian company that has partnered with local consortia to revive the mines that were closed and placed under liquidation five years ago.

Early this year in February, the mines’ liquidator Trevor Glaum announced Premium Nickel Resources Corporation has been identified as the preferred bidder, granting the company exclusive access to the BCL and Tati mines to conduct a comprehensive due diligence exercise until August 2021.

Premium Nickel is expected to make a substantial capital investment in the region of $400 million in preparations to open the mines. In addition, the company has undertaken to make significant contribution to the care and maintenance costs associated with mines during the six months’ due diligence.

Faced with the dwindling commodity prices, and rising operating costs, the government overnight abruptly closed the BCL Group, made of BCL limited and Tati Nickel Mining Company, in a provisional liquidation by order of the High Court of Botswana on 9 October 2016. The government owns 100 percent of shares in BCL, and BCL’s wholly owned subsidiary, BCL Investments Pty Ltd, holds an 85 percent stake in Tati. The remainder of the shares in Tati are directly held by the Botswana government.

The government, which is also a major creditor to BCL, has spent P1.2 billion on the closed mines between 2016 and 2018, and in 2019 injected another P292 million, with the bulk of funds geared towards the maintenance and care of the mines.

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