The government of Botswana has appointed a provisional liquidator to manage the disposal of the assets of top nickel miner Bamangwato Concession Limited (BCL) and two of its subsidiaries following the decision to stop all mining activities last Saturday.
In a press statement released on Tuesday night, the Ministry of Mineral Resources, Green Technology and Energy Security said Nigel Dixon-Warren would manage the liquidation of BCL and its subsidiaries, Tati Nickel Mining Company and BCL Investments.
“The Government of Botswana, as the sole shareholder of BCL Limited (BCL), has decided to place the company and its subsidiaries under provisional liquidation. Mr. Nigel Dixon-Warren has been appointed as the provisional liquidator of BCL Limited, BCL Investments (Pty) Ltd and Tati Nickel Mining Company (Pty) Ltd. As a result, the operations of the mine have been suspended to enable all the due processes of provisional liquidation to take effect.
“This decision has been necessitated by the fact that BCL Limited has become un-economic to operate for some time mainly due to the decline of copper/nickel prices in the market and the high costs of operations. It is very important to note that the government has for some time implemented a number of interventions to rescue BCL including restructuring and financing. However, the Government is constrained to inject more funds into the company due to budgetary challenges,” the ministry said.
Further, the statement said the Government would do everything to minimise the adverse impact of the liquidation process. According to a report submitted by the cabinet sub-committee set up to probe its viability, the government spent over P10 billion to keep BCL open since 2007. The report noted that the company required at least P7 billion to resuscitate the mine and replace most of the obsolete underground mining equipment.
As a result of mining poor quality nickel ore at high cost and the redudancy of three of the four main shafts, the mine had been 98 per cent unproductive, with returns barely able to pay the salary bill since April last year although its annual operational costs remained excessive at P4.6 billion.
The cabinet sub-committee said it recommended closure and voluntary liquidation of the mine to prevent government from losing it to various creditors, some of whom were already mulling the seizure of assets to regain lost investments. All workers remain on full pay pending a conclusion of the liquidation process, which is expected to take between 12 and 18 months.
