22 Nov 2020

 BCL Group of companies comprising BCL Limited, BCL Investment and Tati Nickel Mining Company were placed under provisional liquidation by the High Court of Botswana on October 9, 2016 as a result of low mineral commodity prices and other economic reasons.

Giving an update on BCL liquidation during minister’s question time in Parliament on November 20, the Minister of Mineral Resources, Green Technology and Energy Security Mr Lefoko Moagi said BCL limited was put in final liquidation on June 15, 2017 while Tati Nickel was only placed in final liquidation on February 27 last year.

He said in July last year the initial liquidator for BCL resigned and the Master and Registrar of the High Court appointed new liquidators.

Minister Moagi said the mines at Selebi Phikwe, Phoenix and Selkirk were put into care and maintenance by the liquidator in consultation with government to preserve them for potential investors.

He said the size of the workforce engaged by the liquidators for care and maintenance stood at 531 with 480 workers at BCL and 51 workers at Tati Nickel. 

“In 2019 the new liquidator identified and sold certain non-core assets and scrap through an auction. The auction yielded an excess of P6 million. 

Further auctions will be held in future to sell scrap and non-core assets to be identified,” he said.

Mr Moagi said the liquidators for BCL and Tati received three indicative offers for the assets and completed the evaluation of such offers. 

He said the liquidators had briefed government about the outcome of the evaluation and they had initiated a process for selection of a preferred bidder for approval by the Master of the High Court.

He said it was anticipated that the liquidator would identify a preferred bidder before the end of the year and would conduct detailed due diligence which would include detailed redesigns to modify the existing assets to build new ones which were fit for the  purpose.

“If at the end of the due diligence the preferred bidder opts not to invest at that point, the liquidator will decide what to do with the assets including ceasing of care and maintenance and stripping the assets for sale to pave way for rehabilitation,” he added.

Minister Moagi said following the liquidation process government decided to pay rentals for former employees of companies to stay in company accommodation to ease the impact of the closure of the BCL group on the former employees.

He said the arrangement was subsequently extended three times with the last approval for extension made in March 2020 to cover a period up to January 31, 2021. 

He said the ministry was making necessary preparations to engage cabinet to consider options beyond January 31, 2021.

Mr Moagi said housing units in Francistown, which were owned by Tati Nickel were purchased by Botswana Defence Force (BDF) in 2019 and consequently the ministry served the occupants of Molapo Estate with notice letters to vacate the houses by December 31, 2019. 

He said five former employees of Tati had not vacated the houses and the attorney general was preparing eviction orders to remove them.

Minister Moagi said at the time BCL Group was placed under liquidation,  government initially advanced to the estate of the BCL Limited in liquidation, the sum of P1.2 billion.

“Out of this amount, approximately P600 million was used to pay pre-liquidation liabilities being primarily BPC bills, water utility bills and payment of the terminal benefits of former BCL employees. 

The other money was spent on keeping the mine under care and maintenance,” he said.

He said since the appointment of Mr Trevor Glaum in July 2019 replacing Mr Nigel Dixon Warren, the new BCL Group liquidators had received funding of P292 million from the government for the general administration of the estate including the running costs of care and maintenance for the assets.

Mr Moagi said liquidators had generated income amounting to P25 million. 

He said for the period from February 1, 2019 to October 31, 2020 a total of P52 million was paid by the government for rentals of the BCL and Tati houses.

He said liquidators were engaged in prosecuting and defending various legal proceedings in the jurisdiction of Botswana, Zimbabwe, South Africa and England.

Minister Moagi said the Botswana Geoscience Institute (BGI) carried out an investigation on the earth tremors in Phikwe starting June to September 2019.

He said the study was intended to determine the cause, magnitude and frequency of the tremors. 

He added that the results of the study confirmed the existence of micro tremors and it was believed that the tremors were not significant to cause injury to persons or damage to structures. 

He explained that the majority of the tremors were located to be originating at least a kilometre below surface coincident with BCL’s south-east extension shaft and the tremors coincided with stoppage of dewatering at the shaft from December 2018,  adding that they had since subsided in magnitude and frequency.

He said the BGI project had  since been transformed into a long term monitoring initiative for the safety of Phikwe.

The minister was responding to Selebi Phikwe West MP, Mr Dithapelo Keorapetse, who had asked for an update on BCL liquidation. ends