Onalenna Modikwa
7 January 2009
Selebi-Phikwe — BCL mine in Selebi Phikwe has announced that it will retrench 348 employees as a result of the commodity market crunch that has seen the metal prices dropping below the mine's break even point.
Nickel prices have dropped by 61 percent, copper by 47 percent and cobalt by 62 percent. The mine will retrench 15 percent of the workforce in management positions and seven percent of the non-management staff.
Addressing a press conference recently, General Manager, Montwedi Mphathi, said this time around the mine is looking to the labour force, which constitutes 40 percent of its costs, to try and reduce its running expenses.
He said other inputs like suppliers will also be looked into. The mine will also continue to negotiate with fuel suppliers, among them BP, he said.
The mine also has to cut its annual power consumption of P120 million.
He said the retrenchment exercise is not unique as it has also been happening in other mines and it is a measure to protect cash reserves.
"We are aiming at reducing costs to be able to sustain the mine through cash reserves. With efforts made to stimulate the economy, we should expect the down turn of the economy to last for 12 to 18 months. What we have seen as the mining industry is that metal prices are currently unsustainable".
Mphathi says the mining industry has cut about 14,000 jobs. Some mines closed down their operations altogether while others did away with 60 percent of their jobs. He indicated that the management has discussed the job cuts with the union. The mine has also engaged the government through Department of Labour.
They expect the retrenchment process to start off with an offer of voluntary retirement packages.
At the same time the mine will also assess the skills that it still needs in order to determine cut-off points. The exercise is expected to be complete between early January and mid February.
Mphathi added that counselling will be provided for workers, particularly for those who will be retrenched.
He noted that the mine has a redeployment and retrenchment agreement with the union, which has to be applied when the mine is faced with financial hardship.
There is also an implementation committee in place. The mine is prepared to reemploy within the next 12 months if the downturn of metal prices changes for the better.
BCL also has the problem of the emergency stoppage of the smelter plant and it is working hard to back up the plant. The plant has been down since December 3 so there has hardly been production this month.
The mine's average monthly production break even is approximately P100 million. The manager said there has not been much impact as a result of the stoppage because BCL is a small producer in the world. Nevertheless, the overall supply is going down.
He added that if the commodity prices situation does not improve in the next 12 months, the mine will consider other ways of sustenance.
"At least now we have some funds to sustain ourselves instead of asking for emergency funding from the government. I would also like to thank the government for having bailed out BCL mine during hard times in the past such that the mine did not close down. The closure would have meant that other mines would build another smelter or embark on other costly alternatives.
"The mine has been helping other mines to establish. I believe we can assist to save BCL and we are continuing with the exploration programme to extend the lifespan of the mine," according to Mphathi.
Botswana Mine Workers Union chairman, David Lesejane, says what BCL is experiencing is a global problem and the union acknowledges and understands what the mine is going through.
"As the union we do not like to see our people losing their jobs but we will try and find ways to talk to the workers so that they understand what is happening," Lesejane says.
"I appreciate the fact that BCL is not closing down like other mines," he empathised.
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