Mqondisi Dube
28 November 2008
Selebi-Phikwe — With its 93.6 percent stake, the Botswana government is by far the majority owner of BCL.
The government's majority shareholding is up from 7.5 percent and follows the liquidation of Roan Selection Trust (RST).
Addressing a press conference here on Monday, BCL General Manager Montwedi Mphathi said the world's biggest nickel miner Russia's Norilsk Nickel now has a 6.4 percent share of the copper and nickel producer.
"As part of restructuring, RST went into voluntary liquidation and had placed its shares with BCL as collateral," Maphathi said. "When it could not pay, the government took the pledged shares."
However, Mphathi emphasised that it was not intended that Government own such a huge stake in the company, but the liquidation of RST had brought about the shareholding changes.RST is a holding company 30 percent owned by the Botswana government, 40 percent by public shareholders, while the remaining shares are divided among other minority shareholders.
BCL, which has been bailed out through emergency funding by the government during volatile and hard times when metal prices were depressed, has repaid P960million as part of its debt. A balance of an estimated P2billion - mainly accrued in interest and deferred royalties - is outstanding. BCL has over P3 billion in foreign reserves while the mine has set aside P700 million for the rehabilitation of disturbed areas at the end of the mine's life, Mphathi said.
The current reserves are expected to last until 2013, but Mphathi expressed optimism that the mine would operate beyond that time as further explorations for ore reserves are underway.He said the removal of debt was paramount as the mine seeks to keep afloat in a challenging environment. "If you are in debt," he said, "whatever project you embark on will be absorbed into debt. We want a good balance sheet."
He said the economic spiral-down in neighbouring Zimbabwe had not had a negative impact on the mine's operations. Matte from BCL is refined at two refineries in Zimbabwe - one at Bindura Mine, the other at Emprest Mine.
"We have hands-off business relations," Mphathi explained, "so we are never really at risk of losing money. The companies there might be at risk of closure, but that would not affect our operations," partly because one of the refineries is dependant on BCL material.
But given the current climate of declining metal prices, BCL could be forced to stockpile with the hope that prices improve in the near future.
BCL continued to make a substantial contribution to the country's economy, running an electricity bill of at least P120 million annually, a fact that gave the GM at least a moment's indulgence:
"You can see that if you take out that figure, it effectively wipes out Botswana Power Corporation's (BPC) profits."
Mphathi said with its complex underground mining operations, BCL Mine is still faced with the challenge of sourcing skills; the mine is forced to recruit outside the country or train internally.The mining boom in Australia has seen BCL lose some of its personnel to the Oceania state.
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