24 Feb 2021

Selebi Phikwe councillors have learnt that of the three companies that have shown interest in BCL assets, Premium Nickel Resources Corporation (PNR) of Canada ranked the highest.

The other two are Qora Limited of Guernsey and Msymba Group SA.

However, Mineral Resources, Green Technology and Energy Security Minister, Mr Lefoko Moagi explained during a full council meeting on Tuesday that the companies’ bids were only indicative offers.

He said currently no binding offer had been made.

Minister Moagi further explained that PNR was selected as the preferred bidder by the liquidator, a decision that was made after consultations with government.

He also explained that the liquidators engaged Palaris, a team of international advisors with some local experts, to assist with an independent evaluation of the offers.

He said Palaris completed evaluation of the bids last November which involved baseline review of the BCL group assets and risk assessment for the restart of operations as well as technical assessment against key evaluation criteria and material risks.

The team also conducted company profiling of the bidders including forensic review of directors, credit checks and history of project financing.

Based on the bid assessment criteria, Mr Moagi said, PNR ranked the highest.

He said PNR would require an additional six months to undertake a more detailed due diligence on the assets before they could make a binding offer.

“If they are interested in the assets the transaction will be concluded shortly thereafter. If there is no interest from the preferred bidder, the liquidators will decide what to do with the assets, including stripping off the assets for sale followed by rehabilitation of the mining sites,” stated Mr Moagi.

The indicative offer received from PNR showed that the company was prepared to invest in infrastructure and capital costs to make the mine operational together with various undertakings.

The material strengths of the PNR indicative offer includes restructuring of operational configuration which enables a more sustainable business model, the elimination of smelter sulfur dioxide emissions since the smelter will not be in use and the inclusion of a grade management proposal.

Mr Moagi said PNR did not wish to purchase certain assets including the smelter, slag dump, tailings dam, hospital, farm residential properties and other mining assets.

“It also does not want to make funding contributions towards care and maintenance during the period of exclusivity for carrying out due diligence but this has changed after engagements with the liquidator,” Minister Moagi stated.

Councillors appreciated the update but expressed concern over payment of severance benefits to former BCL employees, cracked houses as a result of earth tremors as well as environmental degradation.

They argued that former BCL employees were promised salaries up to 18 months but only received one month’s salary.

They proposed the setting up of funds for environmental rehabilitation and  unemployment equity.

Responding, Mr Moagi said salaries for former BCL and Tati employees whose employment was terminated on liquidation in June 2017 amounted to P224.3m.

To date, he said,  P222.5m   had been paid while a balance of P1.8m remained unclaimed.

Minister Moagi further stated that government assisted with rentals from February 2019 to January 2021.

 

However, a request had been submitted to cabinet for an extension up to March 31, he said. ENDS