05 Apr 2022

Minister of Mineral Resources, Green Technology and Energy Security has told Parliament that Mowana Mine, near Dukwi village, started operations under African Copper PlC in 2007.
Updating Members of Parliament on the takeover of Mowana Mine by Kopano Mining recently, Mr Lefoko Moagi said the mine was later restructured to Messina Copper Botswana (MCB) following the merger between African Copper and Zambian Copper Investment (ZCI).
Mr Moagi explained that MCB, being a marginal operation, was not spared the dip in metal prices that was experienced in 2008.
He added that thereafter the company had difficulties in maintaining a positive financial strength, resulting in MCB being liquidated through a court order granted in December 2015.
He indicated that the liquidator entered into a Liquidation Asset Sale Agreement with Leboam Holdings, a locally registered company. Mowana mining licenses formed part of the assets of the then defunct MCB.

Leboam Holdings, he said, also entered into a conditional funding commitment with some possible financiers, but the company encountered operational challenges that hindered it from keeping afloat of its financial obligations.
As a result, he said the company was placed under judicial management in December 2018 so that business could be restructured and re-established.
Mr Moagi further informed Parliament that the mine remained under care and maintenance for the duration of the judicial management until it was removed in May 2021 to allow for preparatory works to commence following a scheme of compromise effected by the High Court in November 2021.
He said Max Power Mining was contracted to mine at Mowana Mine through the compromise scheme.
Also, he said Mowana Mine had changed the business name to Kopano Mining, but the mining license remained unchanged under Leboam Holdings.
“The change of name does not affect anything in operations or structure of the company as it was just for re-branding purposes.
The scheme of compromise, pursuant to parts 15 and 16 of the Companies Act of Botswana, was intended to compromise the company’s obligations with respect to the creditors with a view to restoring the company to solvency,” he said.

Such, he said, would in turn trigger cancellation of Judicial Management Order and the company would be returned to shareholders.
“In terms of scheme of compromise, there were three classes of creditors, which included trade creditors, and claims that were proven were to be settled by means of a minimum payment up P250 000 for each trade creditor and thereafter 25 per cent of the value of a proven claim for all amounts in excess of P250 000,” he explained.
He added that the balance of 75 per cent of the value of a trade creditor’s claim was to be extinguished and written off.
The second class of creditors, he said, was secured creditors for which the proven claims would be deemed to be senior secured debt and be repaid on a fixed term basis over a 12-month period commencing 24 months from the date that the scheme was sanctioned by the High Court and such debt was to be subordinated.
He said the third class of creditors were the acquired claims and proven claims that were acquired by the proponent of the scheme, to be converted into preference shares on the date that the scheme was sanctioned by the High Court.

He said further terms of the scheme were that the employees, who were terminated on or before December 18, 2018, Botswana Unified Revenue Service (BURS) or government were classified as ‘preferent creditors’ for purposes of the scheme and were due to be paid in full by the scheme administrator based on the agreed claims if and when creditors affected by the scheme were paid.
He said BURS had two claims, one for outstanding Pay As You Earn (PAYE) and the other for outstanding Value Added Tax as at December 18, 2018.
“As such, all those creditors who were owed less than P250 000 as of December 18, 2018 were also to be paid by the scheme administrator based on agreed claims if and when creditors affected by the scheme were paid.”
Furthermore, he said all agreed claims of creditors that were due to be paid by the appointed scheme administrator in accordance with the terms of scheme of compromise following approval by the High Court had been paid with the exception of BURS, adding, ‘payment to BURS still awaits the outcome of an appeal to the Minister of Finance and Economic Development that was submitted by Leboam Holdings in respect of the claim.”

He said payment, therefore, would be paid after the minister had made a determination.
He added that former employees of Mowana Mine whose contracts were terminated on or before December 18, 2018 were considered as Preferent Creditors under the scheme and all were paid their dues amounting to P17 million.
However, he said there were five former employees of Leboam Holdings who had since come forward post the scheme claiming they should have been classified as Preferent Creditors.
He said it was however understood that the employees were transferred to another company that had assumed the liability for their terminal benefits, therefore were not included as Preferent Creditors in the scheme.

“The matter is still being investigated in consultation with the affected parties, but does not affect the scheme process.”
He said the current mining plan was for open cast extraction of the oxide ores, adding however, that long term access to deeper sulphide ores were envisaged for underground extraction.
Creditors that were not part of the scheme of compromise, he said, were still to be paid their dues as part of the liquidation process through the Distribution and Liquidation account, of which the account would be filed tomorrow with the first notice expected to appear in the Government Gazette of Friday.

The notice, he said, would remain open for inspection for two weeks after which final distribution would be done and all creditors paid.
In addition, Mr Moagi said the mine would extract copper and associated minerals, some of which were traces of platinum group metals and some gold.
Mr Moagi shered the update as a response to a request by Member of Parliament for Nata/Gweta, Mr Polson Majaga, who asked him to update Parliament about the takeover of Mowana Mine by Kopano Mining.ENDS