05 Aug 2014

BCL board chairperson, Dr Akolang Tombale has stated that Botswana government after successfully negotiating with co-partners the Russian mining giant Norilsk Nickel International have acquired a 100 per cent shareholder of the entity.

Dr Tombale said when giving a highlight about the state of the BCL mine on July 31 in Selebi Phikwe that Botswana being mineral resources based economy Botswana government had experience enough on how to own and run private entities.

He said with the Polaris II strategy designed to further prolong the life span of the mine as well as diversify the mine activities from reducing reliance on nickel and copper, BCL has a thrust to be a robust mining giant in the region and world similar to the Anglo American Company.

He said through the strategy it was the beginning of the industralisation backing for the country and its economy. The mine, he said occupies a strategic position in the country’s economy, employing approximately 4 500 people with annual revenues of over US$200 million and total assets of US$800 million.

Dr Tombale said the move was deemed necessary to give the government control of the company particularly in view of its drive to diversify the local economy of the Selebi Phikwe region. He said the Polaris II strategy intended to transform the operations and venture into other products enterprises was beginning to bear fruits.

The chairman said the strategy boosts of six thematic areas being to expand and sustain nickel, copper, develop iron, chemical and by-products, coal beneficiation, and precious metals and other mineral production circuits

He said “with regards to the thrust relating to iron production circuit we have made significant process through the establishment of the Pula Steel Casting and manufacturing plant which would be in operation in six to eight months”.

Dr Tombale said the plant was a springboard to iron production circuit because it would curb the over reliance of import of steel and steel related products. The plant’s raw material would be scrap metal which was abundant resource in the country that was being exported out of the country at high volumes but low value.

BCL, he said has joint ventures with companies holding prospective exploration ground with 100 km of the mine being Botswana Metals Limited on the Magogaphate nickel, copper and silver deposit and Discovery Metals Limited and Japan Oil Gas and Metals National Corporation on the Dikoloti prospect

Other aggressive prospects he said were in Ghanzi Copper Belt where BCL holds four prospecting licenses and was also in partnership on nine other licenses.

In Mahalapye, he said through this strategy BCL was conducting explorations for iron ore and manganese and further it has embarked on extensive exploration for copper, gold and Nickel in Zambia and Zimbabwe and also wish to extend their footprints to South Africa and Namibia.

Dr Tombale through the Polaris II strategy it will give BCL an enterprise status that would ensure that it continues growth and sustainability of the mines operations beyond the year 2020.

On the financial status of the company, he said “we are pleased to inform that the outlook for 2014 remains positive and BCL will end the year on a cash neutral position.”

But he mentioned that in the past five years, the company experienced production and operational challenges coupled with suppressed global commodity prices and 2013 was also not a better year due to fluctuating of metal prices.

Dr Tombale said in pursuit of the Polaris strategy, the company has undertaken a number of initiatives gearing towards the cleaning of a balance sheet and makes it debt free.

This involves the restructuring of the company ownership and debts settlement and so far BCL has settled P3.3 billion to make good indebtedness to government through a combination of P1 billion in cash and P2.3 billion balance as a way of issuance of shares, he explained.

Further, he said it was further agreed to reduce the tax burden from its 40 per cent to the industry norm of 22 per cent with the royalty also reduced to 3.41 per cent on gross income of 3 per cent. By cleaning the balance sheet of its past debt, BCL is now well positioned to approach capital markets for funding productive assets, he indicated.

The company is now debt free aligned to the new BCL Polaris II strategy and well positioned to pursue growth in Africa and can effectively leverage its technical capacity in mineral exploration built over 40 years, said Dr Tombale.

Regarding the employee welfare, he said BCL believe that with an engaged and committed workforce it will achieve its true potential and would continue to strive for improved employee relations.

BCL’s mining operations are spread over a strike of 14km trending north to south with distinct production areas of Phikwe, Phikwe Central, South East Extension, Selebi North and Selebi mines with the deepest mine being SEE with current operations at 1.48km deep. ENDS