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Botswana: Domestic Economy Milks P478m From BCL
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Mmegi/The Reporter (Gaborone)
10 April 2008
Posted to the web 11 April 2008
Mqondisi Dube
Gaborone
BCL Limited uses at least P478 million in the domestic economy mainly through payment of salaries and utilities, general manager, Montwedi Mphathi has said.
He told MPs after a tour of the BCL copper-nickel mine over the weekend that the company is the single largest consumer of power in the country at 18 percent annually. He said BCL pays more than P300 million in salaries per year and has an annual power bill of P120 million.
He explained that the company's fortunes have revived largely due to favourable global metal prices. In the past, the copper-nickel mine relied on government funding for survival but the situation has changed and now it is making profits.
Mphathi said BCL borrowed funds in foreign currency and ended up with a huge debt as the Pula depreciated against major currencies. "Initially, we experienced a lot of technical challenges. We had to build a power station and the Shashe dam was constructed for this project. Additionally, we had to construct rail and road networks," Mphathi said. BCL had to build a plant to reduce sulphur emissions through external funding. Mphathi said the mine has repaid P440 million to cover part of the debt owed to government. "We have been trying to get rid of the debt so that we become a commercial company. We hope we will announce sometime this year that the debt has been cleared," he said. Mphathi told parliamentarians that BCL has been exploring for more ore reserves in a bid to extend the lifespan of the mine from the projected 2013 to 2020.
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He said BCL has carried out two airborne surveys to find more reserves and is now doing tests. Mphathi said the BCL board has approved P139 million for further explorations in the next three years. He said in July 2007, the mine installed a modern smelter to improve efficiency. Previously, the mine was not meeting its target due to frequent break-downs at the smelter. Mphathi said as a result of turnaround in its fortunes, BCL has begun doing community work. "You will understand that we had no money and relied on government funding therefore we could not carry out community projects," he said.
He, however, cautioned that there are operating challenges brought about by regional energy outages. "The operating environment is increasingly becoming difficult as a result of power shortages which will inevitably affect production," Mphathi said. He added that with the depletion of ore reserves, BCL has to mine deeper and this is expensive. He warned that the sustainability of the operation would be at risk if these trends continue.
As a way of mitigating power shortages, BCL has resorted to using energy saving bulbs. Mphathi said the mine has adopted a new strategy termed 'Are checheng' which is meant to increase production and minimise costs.
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