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Lerala mine sale: Enigma to creditors

Publishing Date : 18 June, 2018


At least twenty creditors owed BWP P359 million and 148 former employees awaiting payments amounting to close to P9 million by Lerala Diamond mine might have to wait much longer as the mysterious buyer who purchased the mine for P80 million might pull out of the deal.

The mysterious buyer, according to information reaching this publication has cited failure to raise the capital. The mine went on an online auction last month through auctioneers, GInsustry Dovebid. The auction lasted 7 days, opening on May 24th at 5:00 pm until May 30th at 2:00 pm.  The auction included mining and water rights, five Kimberlite pipes ranging from 0.16 hectares to 2.35 hectares in area, a 200 metric tonnes per hour processing plant and a 4.2-megawatt diesel generator, among other assets.

One creditor told this publication that the mine was sold for a song and that there is a possibility of the mine failing to pay an amount of P615 million as claims which are the company’s total liabilities. One of the creditors is the Palapye Sub-Land Board which is demanding over P700 000 in mining lease payments. The land board declined to comment on the developments of Lerala mine auction. The total value of assets on site of the mine is estimated at P251 million.

The 148 former employees of the mine at Lerala village are owed payroll arrears and terminal benefits totaling to close to P8.93 million and most of them wish to have their jobs back.  Botswana Mine Workers Union (BMWU) Secretary General Moffat Ramokate also wonders who the purpoted mysterious buyer could be and whether the new buyer will take back former employees.  

Online auctioneer, GoIndustry DoveBid associate director John Taylor told a diamond industry magazine Rapaport that they received 80 bids for Lerala mine. Last month when the bidding kicked off only twelve bidders had visited the data room that the auctioneers set up to share geology reports and mine data of the mine.

This week Lerala mine liquidator, Kopanang Thekiso would not reveal the name of the mine buyer saying the transactions and the identity would be confidential until the full sale process is complete. He confirmed that the identity is withheld because the actual buyer might pull out of the deal. Thekiso said the auctioneers are currently handling the transfer of mining rights and associated paperwork with regards to the sale. The liquidator also said he is satisfied with the outcome despite some believing that the mine was sold at a low price.

The new buyer will get transfer of the mining license and rights; a complete processing plant, which includes a 200 t/h conventional fines plant and a course dense medium separation plant; final integrated X-ray recovery house; primary jaw crusher; secondary cone crusher; high-pressure roll crusher; scrubbers; material reticulation of conveyors; screens; bins; thickener plant and tailing dams; diesel generator plant; electrical reticulation; workshops; offices; and a mining camp.The Lerala Mine was opened in 2008 and had to be shut twice due to weak sales, until it finally was placed under judicial management in May last year, leaving 130 people out of work and millions in unpaid bills.



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