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BCL mine on the verge of becoming white elephant

If the current boiling impasse between the BCL liquidator, Nijel Dixon-Warren and the Minister for Mineral Resources and Energy Security, Eric Molale is anything to go by, next year the mine will be left to be a white elephant dumped by the two parties on the feet of Selibe Phikwe and surrounding areas’ people.

 Last week Minister Molale revealed that BCL liquidation will be closed down in June 2019, but there are underlying and daunting issues to be dealt with. Adding to BCL woes is the recent information reaching BusinessPost revealing that the mine is currently countenancing an Environmental Rehabilitation Liability of P3 billion and this makes the mine less attractive to potential investors. This is the money that should be paid for environmental insurance and investors should assume the costs if government or previous owners have not paid.

However, the recent development which emanated into a spat between the liquidator and government was because the latter does not want to pay more for the liquidation. But there is another alternative to reduce the liability; by taking a risk of buying the mine and thrive on rising nickel prices and the recent revolution of electric vehicle-battery mineral. However, as much as a new buyer could be enticed to restart the mines and the smelter, this could take five more years.

It is alleged that the machinery and shafts at the mine are slowly deteriorating and there is flooding underground, something which will also scare away potential buyers. Information reaching this publication is that about 45 bidders have shown interest in the BCL mine and most of them have failed to impress the liquidator. Currently,Minister for Mineral Resources and Energy Security Eric Molale and BCL liquidatorNigel Dixon-Warren have fallen out and observers believe this impasse will not end well as far as the mine’s future is concerned.

Dixon-Warren is demanding more money in order to facilitate care and maintenance of the mine so that it does not lose shape and is able torecommence operations at a later date. However, Molale rebuffed the liquidator’s demand and this led Dixon-Warren opting to maximize costs by reducing the care and maintenance staff at BCL.

This has chagrined the minerals minister who openly told parliament that there is need to get rid of Dixon-Warren as he has made the mine a hazardous hub “the shafts have been flooded, people are exposed to danger of working under unsafe conditions.”Government wants Dixon-Warren to sell the mine to any private entity interested.

The Botswana government closed the mine two years ago because it was costly and during that time the mine needed P2 billion for its lifeline. In the ongoing liquidation, government has so far forked out P1.1 billion for paying former employees benefits and care and maintenance and the liquidator want that money to be topped up. Molale is shying out on giving the liquidator more concurring with opposing legislators last week that the liquidator want to rip the government off.

In this liquidation, Dixon-Warren has so far pocketed over P42.3 million in over twenty months, averaging P2.2 million monthly in fees. He told this publication few months back that contrary to popular belief, the money does not go all to his pocket but to the liquidation process.
Asking a question with apparent skepticism before parliament, Selibe Phikwe West Legislator Dithapelo Keorapetse wanted to know if Dixon-Warren is adequately protecting the assets of BCL, whether his is to protect the interests of the public or only creditors.

 A lot of parliamentarians believe the liquidator is wasteful and should be fired, something which is said to be in Molale’s mind. Molale suggested that there is bad blood between government and the liquidator. Of the deteriorating situation at BC, Molale highlighted the liquidator’s competence and said: “I am faced with a precarious situation at the mines. The shafts have been flooded; people are exposed to danger of working under unsafe conditions.”

“The story of Phikwe is sad. The first problem was closure of BCL which threw people into instant destitution,” said Keorapetse. Efforts to interview Dixon-Warren failed because he is now not allowed to talk to the media but the Master of High Court can do the interview on his behalf. Registrar and Master of the High Court, Michael Motlhabi would not talk to this publication on a telephone interview but rather asked for an email inquiry. He however did not respond to our questions before press time.

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Business

China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Business

Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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