Nation still haunted by the BCL shut-down decision!

The decision to put BCL group under liquidation some two years ago by the Ian Khama administration continues to evoke mixed reactions even to this day.

The closure of mines under BCL group, BCL and Tati Nickel has certainly left many disappointed especially the more than 5000 workers who have added to Botswana’s nearly 20 percent of unemployment rate.
The Selibe Phikwe region, where BCL copper mine was located is just inches short of a ghost town, while concerted efforts to revitalize the economy of the region are faltering, even with the intervention of former Bank of Botswana Governor Linah Mohohlo. 

Listening to top government officials and ministers explaining the closure of the mine, the conclusion is that the decision was not well thought of, after all government itself cannot exactly tell when the liquidation process will wind up.
It is understandable that the liquidation process is a legal matter that by nature has unpredictable duration.

However, in placing the two mines under liquidation, government should have had a reasonable time frame on the whole process as it now has serious financial implications. The time frame is of concern in view of the spending that has already hit the 2 billion mark, including the liquidator’s hefty P2million monthly fee. The Minister responsible, for Eric Molale, justifies the continued payment of the above fees and other care and maintenance services of the two mines and so, this sounds like a daylight robbery.

This happens at a time when some primary school children are still taught under trees, shortage of drugs are the order of the day in our health facilities as well as the intermittent delivery of water resources to the citizenry due to lack of funds.

Now that government finds it necessary to continue to funds BCL liquidation, one wonders if it was necessary to close the mining group as a whole, without exhausting other options. Before former General Manager, Dan Mahupela and his entire management team were relieved of their duties as the mine was closed in October 2016, an ambitious strategy Polaris 2 was already in motion.

The multi-pronged strategy basically explored how BCL group could diversify its fortunes away from just copper and nickel. The strategy was well-crafted. Some of the minerals that the group was already exploring were iron ore, silver, diamonds as well as additional copper deposits. As a matter of fact, BCL was at an advanced stage of establishing Dikoloti nickel mine as a joint venture with the now defunct Discovery Metal Limited.

The mine, once full operational, was to add a further ten years into the lifespan of BCL mine itself. In addition, the BCL group had also hatched a joint venture with Botswana Diamonds to explore for diamonds at Maibwe Project in the Gope area. BCL group owns 51 percent of the joint venture while the Botswana based Future Minerals, holds 20 percent, and South Africa’s Siseko 29 percent.

This basically put Botswana Diamonds’ interest in the project at 15 percent. Having reached a conclusion that the Maibwe Diamonds project had potential, Botswana Diamonds which is quoted in the local stock had put an offer before the BCL liquidator to buy out government’s controlling stake. Having cited this examples, and possible how Polaris 2 could have been critical to the government as the sole shareholder, this now brings the question, why did government take a blanket decision to close BCL group as whole? In my view, it could have been wise for government to have unbundled BCL group to pave way for subsidiaries especially those who had good prospects to continue running.

These are the projects such as those that were exploring for diamonds and nickel as espoused by Polaris 2, especially that the company had spread risks by partnering with existing players in the mining industry. Instead, government took the easiest route of closing the whole group without fully evaluating the business case of sustainability as hatched by the former board of directors and executive management.

As we speak today, the shareholdings in these various exploration companies that were formed under Polaris 2 strategy could have been under the care of Minerals Development Company Botswana (MDCB).It is my informed judgment that government has not given the team at BCL time to really sell their story under Polaris 2. We cannot deny the fact that BCL and Tati mines were bleeding government billions of Pula every year, but to close the group as a whole was perhaps not the best decision taken. Unfortunately as we have come to understand it, the country is ruled by politicians, some without adequate education, but often overrules credible advice from technocrats. 

Right now the country is stuck with a previous regime decision to place BCL under the hammer; a decision made without much consultation with concerned parties. Jobs have been lost! The former minerals minister, Sadique Kebonang promised to look for investors to save BCL but has never reported back to the nation before he was fired by President Mokgweetsi Masisi.

Now, the Government is saddled with scheduled payments of liquidators and other related fees as well as the expected billions of Pula that will be used to rehabilitate the mine.
We can only hope the Masisi regime will make the right decision on BCL.