19 Oct 2016

Government will spend P60 million every month during BCL Mine’s liquidation period, the Vice President, Mr Mokgweetsi Masisi has said.
The mine was put under provisional liquidation two weeks ago.
Mr Nigel Dixon-Warren of KPMG was tasked with overseeing the liquidation process and would deliver a final report in February.
Addressing a Botswana Democratic Party (BDP) press conference in Gaborone on October 18, Mr Masisi stated that the decision to enter provisional liquidation was arrived at after a long and careful process of consultation.
He said government had secured funds to finance the liquidation process.
“I was tasked with leading a cabinet sub-committee on BCL in my capacity as Vice President to interrogate and advice government on BCL matters.We deliberated to establish the business health condition of BCL and advice on what to do,” said Mr Masisi, who is also the BDP chairperson.
He said the sub-committee held candid talks with Selebi Phikwe residents, businesses in the town, workers at different levels within the mine and around the mine, management, board and the union leadership.
“There were some truths that were universally agreed to, among them, established facts that the mine has been in operation for just over 40 years and out of these, it was only in a period of three years that the mine returned profits. The great majority of the time it was returning a loss.
Another fact was that private sector investor partners who owned shares in BCL had overtime, as the liquidity position of BCL became precarious and investors were expected to inject capital into the business, decided to jump ship.
“They left because they decided they were not willing to put more resources in. Government then took over the remaining shares in the hope and belief that the further injection of capital would help the BCL to continue operations,” he explained.
However, Mr Masisi said everything nose-dived when metal prices slipped down, making it unprofitable to run the mine. He said the mine continued to churn out losses because of the situation with deteriorating metal prices.
The Vice President said government guaranteed a P1 billion loan for BCL early this year but the money was exhausted in a few months largely by payment to creditors with no real improvement to the capital conditions of BCL.
Therefore, when a request for a further P1 billion was made, government was not willing to approve it because it was already running a deficit of P6 billion.
“So we met and decided to come up with the best strategy to control the situation. We deliberated on this at full cabinet using all the details we had found, all the legal advice, the best financial advice from real experts who have been in this business and a decision was made to seek a provisional liquidation as a solution because it allows for a managed soft ending. This liquidation will cost government no less than P60 million a month and we have already secured that money,” Mr Masisi said.
The Minister of Mineral Resources, Green Technology and Energy Security, Advocate Sadique Kebonang stated that the liquidator would do a thorough assessment of the mine and determine what should  be done.
He said if there was no investor interested in buying the mine, there were possibilities that the affairs of the mine would wound up. ENDS