01 Aug 2017

The Minister of Mineral Resources, Green Technology and Energy Security, Advocate Sadique Kebonang has informed Parliament that government  did not have the financial resources to make further injection into the BCL group to sustain the mining related operations.

Delivering a statement to Parliament, Advocate Kebonang stated that government decision to discontinue funding resulted in the necessary suspension of mining operations as the BCL group was highly indebted and some suppliers had stopped supplying.

He indicated that a collective cabinet decision was then reached to allow the BCL group to be placed under provisional liquidation which was implemented through a court order in October 9, 2016.

“The provisional liquidator recommended that the mine be placed under care and maintenance while he determined where it was possible to restructure the operation to turn operations to profitability or sell the assets to a party who was going to recommence operations,” he said.

He highlighted that BCL limited was eventually put under final liquidation on June 15, 2017 while Tati nickel mining company and BCL investments will continue to be under provisional liquidation until December 14, 2017.

The minister said as a consequence of the provisional liquidator, the assets of the BCL group are under the control of the Provisional liquidator who is accountable to the creditors.

Advocate Kebonang noted  that the government had met the costs of the Provision liquidator and an amount of P832 million had been disbursed by the provisional liquidator out of  a total budget provision of P844 million up to April 2017.

The major costs to be met from the funding, he said are the care and maintenance costs and terminal benefits payment for the former employees which will be ceded to government.

 He said information obtained from the Provisional liquidator indicated that all but nine employees who were employed as at the date of  liquidation and who were terminated because of the liquidation had received their terminal benefits and there were also 84 employees who were terminated prior to the liquidation who were also due to be paid their terminal benefits.

Over and above meeting the costs of the provisional liquidator, government, he said, has also taken certain initiatives to mitigate the adverse impacts of the closure of BCL operations such as meeting the costs of basic education for former employees children till December 2017 and transferring former patients of the BCL mine hospital into government medical system.

Advocate Kebonang explained that the main reasons for benefits not being paid was that people were not contactable or failure on the part of the former employees to complete the pre-payment process. A total number of 401 employees are engaged by the provisional liquidator in the care and maintenance team.

“Preservation of the BCL group assets through the care and maintenance is essential as government  wishes to facilitate any process to salvage as much  value as possible  from the situation, the ideal being the resumption of mining operation,” he said.

He said high level efforts would be undertaken to identify and attract potential interested parties that could then be referred to the provisional liquidator to deal with any business proposition.

With regard to interests shown by a Dubai -based  entity called Emirates Invest House in acquiring the BCL group, the Minister highlighted that the Emirates Investment House made no offer after the extension of the provisional order on May 15 2017 hence resulting in lapse of exclusivity granted to Emirates Investment House to conduct due diligence.

“There was no offer at the return date of June 15 2017 to purchase the BCL group, thus a decision was taken to place BCL under final liquidation. The provisional liquidator has also undertaken efforts to identify potential interested parties, a number of which has expressed interest primarily in Tati Nickel mining company,” he said.

He further indicated that government had also received a proposal from a certain Dubai based company seeking to re-process the BCL slag dump to recover metal values and to manufacture steel and cement products, adding that a viable proposal on the viability of the project would be referred to the provisional liquidator.

Meanwhile Minister Kebonang stated that government was actively pursuing options of life beyond BCL mining operations for the SPEDU region hence the formulation of the Selebi Phikwe revitalization programme which was driven by the Ministry of Investment, Trade and Industry.

He said the three anchors of the Selebi Phikwe revitalization programme was expected to create in excess of 6 800 jobs in the SPEDU region. ENDS