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Gov’t chases Canadian, Australian companies for BCL

Publishing Date : 03 September, 2018


Government is running helter-skelter to find a technical partner and have BCL mine re-opened following a compelling case necessitated by the rising copper and nickel prices in the global market. Government has developed desperation following a collapse of an earlier attempt to sell the mine to foreign investors.

Government’s stringent time frame, is also necessitated by the ruling Botswana Democratic Party (BDP)’s frantic desire to salvage at least one of the Selibe Phikwe constituencies. Information passed to this publication indicates that BDP is aware of the sombre mood in Selebi Phikwe, a situation set off by the closure of the mine, sluggish growth  as well as ineffective SPEDU initiative.

BDP currently holds one of the Selebi Phikwe constituencies (Selebi Phikwe East) under the custodianship of Minister of Presidential Affairs, Governance and Public Administration Nonofo Molefhi. “We are in talks with various companies; one in Australia and another Canadian company. We are basically looking for a possible technical partnership,” revealed a cabinet minister, who spoke to this publication.

“It would not be advisable for government to open Tati Mine without the Selebi Phikwe smelter. There would be no business in doing that and we would not be making money from that kind of arrangement.” The insider revealed that there were some who suggested only the opening of Tati Nickel Mine instead of the BCL mine, a decision which some also argued it would not make economic sense for Botswana in both job creation and revenue generation.

According to the impeccable source, one company had developed interest in coming on board, but wanted to be given 12-18 months to assess the mine before committing to a partnership with the Botswana government. Government however, prefers a deal that would be struck before the 2019 general elections, something which would also see the marriage based on political expedience rather than marriage.

The government had taken the decision to close the BCL and Tati Nickel Mine during the country’s golden jubilee celebration following the dramatic fall in commodity prices as well as perennial losses by the BCL group. Government indicated that it could not afford over P8 billion it needed to recapitalise the mine and to keep it going.  In the process, over 6000 jobs were lost, bringing misery to the residents of Selibe Phikwe, Francistown and surrounding areas.

World Bank and International Monetary Fund (IMF) also indicate optimistic forecast about nickel prices going forward.   Nickel prices grew by 5.7 percent in February continuing a medium growth. Since February 2016, when the price of nickel reached a 13 year low nickel prices have rebounded by 61 percent and averaged at $13.3925 per metric ton in March 2018.

The price of nickel is the indicator of a situation in different business industries such as steel and car production.  Because nickel is a very popular component of alloys the previous year was not very clam for the nickel market because of the new direction of politics in china and ecological problems in the Philippines which reduced the supply of nickel.

Various leading economists expect nickel deficit and high prices as a result. The world bank in its commodity forest report estimated that the average spot price for nickel will grow slightly further in 2018 to US$ 10 559 per metric ton from US$10 100 in 2017. Over the next decade, the price will grow to us$18 000 per metric ton.

The IMF’s report revealed similar expected rise from US$9.227 per metric ton in fourth quarter 2017 to US$9.438 in 2018 and growth to US$9.557 in 2019. What for longer term forecasts, experts estimate a very slow growth to US$9.987 per metric ton by 2022. The two agencies also reveal that Copper prices will rise following disastrous performance in 2015 and 2016, though IMF expects some decline in future of copper prices.

Government also has the responsibility, to rehabilitate the land, as required by the law. It is international practice that once a mineral deposit is exhausted, mining companies have a responsibility to work towards land rehabilitation – the return of disturbed land to a stable and productive condition.

This include engineering works to decommission and dismantle infrastructure, complete rehabilitation, grade landforms for effective drainage, cap and cover tailings facilities, as well as implementation of post-closure monitoring networks. Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama told parliament this week that government is developing a detailed and costed rehabilitation plan that would be implemented to address the BCL mine and the periphery environmental issues. The question had been asked by former Minister Minerals Sadique Kebonang, who had wanted to know, the intention of government with the aftermath of BCL closure.



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