Ndaba grills government on BCL shutdown
Member of Parliament for Gaborone Bonnington South, Ndaba Gaolathe says the decision by government to close BCL mine was a gross mistake, a calamity, a disaster and a misadventure.
Gaolathe stated that in the period leading to the closure of BCL, all the signs had been there. He explained that the management of this company had spent over P3 billion in an acquisition spree. They had spent more than P700 million in the refurbishment of this BCL, he said adding that more than a Billion Pula had been spent as a result of smelter shutdowns.
“I had a reason to make one or two clarifications on this matter. The first is this idea that BCL had to be closed because it was not profitable, it was losing money. I would like to make it very clear that some of the most successful companies in the world, right now and in the past are actually companies that do not make money. They are companies that are not profitable; they are companies that have made losses.
It is not a question of profit. It is also a question of whether a company is able to sustainably generate the cash flow. It is also a question of whether the larger national objectives are being met, igniting other sectors which otherwise will not be able to be ignited without this particular company being in operation,” said Gaolathe when debating a motion by MP for Selibe-Phikwe West Dithapelo Keorapetse calling on the facilitation of the re-opening of the BCL.
Gaolathe who is also President of Alliance for Progressives (AP) said when a company is going through a phase of expansion, and through that expansion entail the acquisition of new infrastructure, particularly at a large scale, what that does is that because of the appreciation, it may make losses over a long period of time but that company is able to generate cash flows.
“We believe that with the right strategy, BCL is in the same mode,” he told Parliament. The legislator pointed out that BCL is a company that can make losses over long periods of time, as long as it is managed properly, as long as it generates the cash flows. He said even when one looks at the trend in copper prices, right from the 1960s until 2010, the copper prices have for the most period being less than US$1.50.
“In 2015, BCL had a 50 days shutdown. In 2016 it had two months of continuous shutdowns. I am raising these issues to make it clear that the reason why BCL was shutdown was because of poor management and poor strategic leadership. There is no question about that. Now this Motion that is being proposed by Keorapetse, it has to be clear, he is not saying that the Government must finance BCL or that the Government must run BCL. He is saying that the Government must put in place mechanisms to facilitate the re-opening of BCL,” he argued.
Gaolathe put it to Minister Eric Molale that he personally on behalf of the opposition had written a letter to his predecessor, which letter was also written to the Minister of Finance and Economic Development, Kenneth Matambo.This letter according to Gaolathe entailed a Draft Bill which proposed a mechanism to pursue exactly what Keorapetse seeks to pursue, which is a mechanism of how best to facilitate the re-opening of the BCL. That mechanism, he said entails among other things; putting in place a fund which will have experts who will consider different proposals of investors who can feasibly run BCL.
He stated that this would be done with the condition that the Government must embrace and understand that it also has to make investments on some of the sunk costs, on some of the environmental clean-up and the other investments that need to take place in order to facilitate investment by investors who have the knowhow and the capacity to run a sustainably feasible BCL.
“This is not only possible, but is actually desirable. It is desirable for the sake of triggering and igniting a whole range of sectors around copper and nickel which we believe is part of what this country needs to develop its manufacturing sector. To development sectors that can generate employment opportunities for our people, as a way also of diversifying the economy,” he said when supporting the motion.