A knockout punch also known as a chassis punch can end all contests decisively. It can finish fights without dispute and can save your life in grave circumstances. Government’s shocking announcement last week Saturday to place BCL under provisional liquidation with immediate effect owing to unprofitable business dealings – delivered a final blow to a mine that was battling with high operational costs, huge debts, and low commodity prices.
The decision is surely meant to stop the government purse from bleeding excess Pulas, but it shall wilt away a lot of livelihoods. Nigel Dickson Warren of KPMG has been instructed to finish off the job in four months, as a liquidator.
Addressing multitudes of mine workers in Selibe Phikwe last week Saturday (October 8) former Minister responsible for Minerals & Energy, Kitso Mokaila stated that the mine was a business running at huge loses hence the government as the single shareholder was drained by bailing out the mine countless times to prevent job losses. He said the bailouts were now crippling the national economy.
Advocate Sadique Kebonang who now heads the re-organised Ministry of Minerals, Energy and Green Technology explained that it cost double the selling price to mine the ore from BCL deposits. “BCL mines at 8 USD per tonne and sells at 4USD, that is a big loss and we cannot continue pumping money into such a business,” said new Minister who recently took over from Mokaila.
“Currently the mine needs P7.6 billion ($713 million) pula to continue operations and if the government was to inject such amount into BCL through guarantee loans or direct bailout, we would have to put the entire economy to a halt and cease provision of ARVs and tertiary education just to name a few,” emphasized Advocate Kebonang.
A cabinet subcommittee commissioned by President Lt Gen Dr Ian Khama to evaluate and map the way forward on the BCL mine explained to workers that a consensus has been reached after an intense assessment, that it makes economic sense to cease operations at the copper nickel mine because commodity prices in the market were not business friendly.
THE HISTORY OF BCL
Originally known as Bamangwato Concessions Limited, BCL was founded in 1956 in a meeting arranged by John Bunchunan, Chairman of Minerals Separation Limited, between Tshekedi Khama, Regent of Bamangwato Tribe in Bechuanaland Protectorate and Sir Ronald Prain, Chairman of Roan selection Trust (RST).
An agreement between the parties was signed on the 2nd June 1959 and subsequently ratified by the British House of Lords. This agreement with RST Exploration Limited, a subsidiary of Roan Selection Trust deployed BCL to operate the concession and to commerce mining copper and nickel discovered in Selibe area in 1963. In 1966 higher grade ore was discovered at Phikwe.
BCL continued to grow, dominated by private shareholding with Norilsk Nickel being the largest shareholder until 2013 when the government bought out the Russian mining giant by converting an outstanding P2.3 billion loan BCL owed to government into equity. At the time of that decision Norilsk was holding 6 % stake in BCL and had reduced its stake over the past two decades of operations at BCL.
In 2014 the BCL also announced buying out of all Norilsk Nickel operations in Africa and that included Tati Nickel Mine and 50% of Nkomati Mine in South Africa. The transaction was to see BCL pay P3 billion plus and, earlier on that year the company bought 50.5 % in Pula Steel Casting Manufacturing.
EVENTS THAT LED TO COMPANY LIQUIDATION
In February 2016 government agreed to guarantee a 1 billion pula BCL loan acquired from Barclays Bank. When addressing multitudes of workers at Selibe Phikwe stadium this past Tuesday, the Vice president, Mokgweetsi Masisi indicated about three weeks ago BCL management had submitted a proposal requesting another P1 billion from the government, and decision makers reached a consensus that enough was enough, no more bail out.
The Vice President explained that BCL lifespan was shortened by low copper and nickel prices in the market. “Market prices put by foreign countries who buy BCL products is the reason BCL reached a dead end sooner than expected, we don’t have control over commodity market prices, thus it was only right to close BCL in order for other economic activities to continue,” said Masisi.
The Vice President went on to explain that under these circumstances, the best decision was to put the company under provisional (voluntary) liquidation in order to protect workers packages and exit incentives . “Creditors were going to put this company under forced liquidation anyway, and that was going to be harsher on employees, thus we weighed options and approached the High Court on Sunday,” explained Masisi. He said a liquidator was appointed to asses BCL asserts, pay its debts and make final economical stance on the future of the company.
BCL POOR MANAGEMENT
However workers, opposition political parties and other pressure groups have rubbished reasons advanced by government that BCL is closed because of the prevailing low copper and nickel prices in the international market.
The Member of Parliament for Selibe Phikwe West, Dithapelo Keorapetse lashed out on the BCL management. He accused some in the leadership of corruption and poor management. He said the government lacked monitoring and proper oversight as the only shareholder. Speaking to Weekend Post on Tuesday, Keorapetse said: “I have talked about this in Parliament, that Polaris II and its Nkomati acquisition were corruption breeding exercises, and the same can be said about the shutdown undertaking – this will cost BCL and government billions of Pula.’’
The MP said the government has been ignorant and did no listen to him, “I warned the then Minister, Mr Mokaila about reckless procurement occurring at BCL, for the shutdown, billions of Pula left the mine through unprocedural processes.”
Meanwhile, government and BCL officials told Weekend Post that the shutdown of the smelter was done to allow for its refurbishment so it readies for more ore from Tati and Nkomati for processing, “We anticipated pick capacity for the Smelter and thus shut down and Nkomati acquisition was to get ready for that, unfortunately it did not work out as expected,” permanent secretary in the Ministry of Minerals, Mr Kgomotso Abi explained.
The permanent secretary said if there were corrupt dealings, those who have information should have or still should come forth. Addressing the press on Monday, Abi said: “DCEC doors were open for any corruption tip offs and the expectation is that those who were aware of any maladministration and economic crime at BCL should have reported the cases.”
THE LIQUIDATION PROCESS
The High Court on Sunday appointed Nigel Dickson Warren of KPMG to dissolve BCL Limited. Addressing members of the media on Monday, Permanent secretary in the Ministry of Mineral, Energy & Green Technology, Mr Kgomotso Abi alongside dissolved BCL board Chairman, Kholane Fichani indicated that the appointed liquidator was given four months to complete the liquidation processes. In a stakeholders’ consultative meeting on Tuesday, before addressing multitudes of workers, Vice President Masisi revealed the government will conduct a parallel inside look to the liquidation process in order to iron out any concerns that might arise.
Adding her voice, Chairman of government owned Mineral Development Company which recently bought out De Beers at Morupule Coal Mine, Reginah Sikalesele-Vaka told workers in Selibe Phikwe and its subsidiary, Tati Nickel Mine that the liquidation process intends to come up with resolutions that are in the best interest of workers.
“The liquidation process is necessary to determine and inform the government on what assert BCL has, and what can be sold at what price, as well as advice the government on possible operations or ore deposits that can be resurrected at a later stage,” said Sikalesele-Vaka.
She explained that the liquidator will most importantly determine workers’ exit packages. “The liquidator will determine how much and how you as the workers will be paid as exit compensation, I urge you to cooperate with the government and the liquidator,” she said.
Sikalesele-Vaka has just assumed duty at the government Mining Industry oversight company from Botswana Stock Exchange where she served as Chairman as well.
WORKERS SALARIES & BENEFITS
On Saturday (October 8) Minister of Investment, Trade and Industry, Vincent Seretse revealed that despite the halted of operations, workers remain BCL employees and shall receive full salaries until decision is taken on the way forward.
Seretse who is also a member of the cabinet BCL investigation subcommittee added that those occupying BCL houses shall do so until liquidation process is complete.
On Tuesday 12th October, Minister Advocate Kebonang shocked the workers with a slightly different statement at the Selibe Phikwe stadium. ‘’We guarantee full salary payments for October only, for next month and the month after next, that is entirely on the jurisdiction of the liquidator who is currently handling all paperwork and financial accounts of the company.”
For their part Botswana Miners Workers Union (BMWU) expressed concern over the rushed decision and short notice implementation of the resolution to close the mine. In an interview with this publication this week, BMWU representative, Mr Western Ebepilesaid they had anticipated that BCL operations will come to halt, but they question government lack of transparency and the supersonic decision to shut down.
“We will fight tooth and nail to ensure that our members receive their packages, if need be we will approach the court of law if there are unconstitutional delays,” said Ebipile.
THE SOCIO- ECONOMIC IMPACT OF BCL CLOSURE
Selibe Phikwe is home to over 50 000 inhabitants as per the 2011 population census and BCL had absorbed well over 4000 workers who provided socio-economic support to their families.
Consequently the closure of BCL, the largest single employer in Selibe Phikwe, and second largest private sector employer in the country, cripples other businesses that relied on 4000 BCL employees’ income for survival, from Retail outlets, SMMEs, transport providers, hair salons, the list is endless.
Speaking to Weekend Post this past week, Mr Philip Malema, a taxi driver expressed hopelessness as he shed tears, “I have been given this corolla by someone to work for it and pay back his money with interest, they are going to confiscate it as they will be no business that allows me to pay them as per our contract. It is very likely that I have worked for nothing,” said Malema who hails from Bobonong.
BCL mine closure is said to also threaten other parastatals and private companies’ production. The mine accounts for the largest stake in Morupule coal mine clientele, being the largest consumer of the coal produced from the Palapye based mine.
The complexity of the BCL operations has also seen the company being the largest consumer of electricity and water in the country, thus its closure is likely to impact heavily on the balance sheet of Botswana Power Corporation (BPC) and Water utilities Corporation (WUC).Morupule Colliery is likely to cut down its production and consequently reduce workforce unless new business is identified, especially in neighbouring countries.
Parents have also questioned government’s decision to close the mine now, they find the decision reckless and lacking vision. Speaking to this publication, Mr Boipuso Makame, a middle income parent at Botshabelo Township, told this publication that the mine closure comes at a wrong time when children are writing examinations – from primary to senior secondary schools. “They should have waited until exams are completed, psychological shock will disturb our children, our schools are likely not to do well this year,” observed Makame who also works a BCL.
GOV’T PIN HOPES SPEDU AND OTHER PARASTATALS
Various Government officials have indicated during the past two weeks that Selibe Phikwe will not be left to turn into a ghost town. In his address to workers on Tuesday Vice President Masisi revealed that SPEDU is now a revived company that will work at a high speed to resurrect the economy of Selibe Phikwe. He revealed that a cabinet sitting has already proposed more cash injection into SPEDU. “We are in the process of evaluating how much SPEDU needs to create double the employment here in Selibe Phikwe,” said Masisi.
The Vice President further indicated that CEDA and SPEDU as well as the SPECIAL ECONOMIC ZONE AUTHORITY and other business development parastatals will make proposals and the government is in a position to pump more money into those, in order to unearth other alternative economic activities.
“We will not allow Phikwe to turn into a ghost town, ’’ said the Vice President while speaking at a meeting arranged by the Ministry of Investment, Trade & Industry to engage the business community this Monday (October 10ths).
The Permanent Secretary in the ministry, Ms Peggy Serame urged the Selibe Phikwe Chamber of Commerce to put up feasible business proposals that can help resuscitate the town and the region.
According to Khumbulani Mabena, Chairperson of the Chamber of Commerce, they have been given a week to do so. “We already had those business proposals in our shelves, so we will just polish them up and submit them,” said Khumbulane Mabena.
Public Servants should brace themselves for some changes as the government is in an overdrive mode to overhaul the public sector. The government has also set the tone for the looming changes as it has added the public sector to its looming list of major and sweeping reforms.
This is contained in a savingram from the Permanent Secretary to the President (PSP) Emmah Peloetletse’s office showing how the government intends to “take stock” of all reforms in the public sector through the establishment of an inventory. Peloetletse’s savingram addressed to various ministries and the Directorate of Public Service Management (DPSM) reveals that the government is working around the clock to implement some changes in the Public Service.
The savingram reminded Permanent Secretaries of various ministries and DPSM that the public sector reforms unit (PSRU) at the Office of the President is mandated with Coordinating Reforms across the Public Service. “This essentially entails providing the strategic guidance and facilitation in the implementation of reforms across the Public Service. In this endeavour the Unit has in the past with Technical Assistance from European Union developed a template for documenting Reforms in the Public Service and documented ten (10) major reforms across the Public Service,” reads the savingram in part. It added that “The Unit has lately rolled out the Change Management Framework in an effort to facilitate effective and efficient management of change in the Public Service.”
According to the savingram, it has been noted that for a variety of reasons the use of the template for documenting reforms has not been universally used across the Botswana Public Service. It further states that to facilitate the documentation of the reforms it is essential that an inventory of the various reforms across the Public Service (Central Government, Local Government and State Owned Entities) is established.
“By this correspondent we are seeking your assistance in populating the attached template to provide basic information on the various reforms. The PSRU will, through the various Coordination of focal Persons facilitate the full documentation of the reforms once the inventory is established,” the savingram further stated. The copy of the template among others calls on the focal persons to fill out them form under several headings; they include title of reform, start date, reform objectives, reform components, reform components, progress status.
The savingram echoes President Mokgweetsi Masisi’s announcement last year during his state of the nation address that as a nation Botswana has set itself a lofty goal of becoming a high income country by 2036 and has come up with a list of reforms among them digitisation of government infrastructure. He said the path to achieving this goal dictates that, Botswana takes deliberate steps that will transform its institutions; the way Batswana think and the way they act.
“It is with this in mind, that I presented a Reset Agenda in May 2021, with the following priorities: Save Botswana‘s population from COVID-19, by implementing a series of life saving measures that include a successful and timely vaccination programme, Adherence to COVID-19 health protocols remains key and align Botswana Government’s machinery to the Presidential Agenda, to ensure that the national transformation agenda will be embodied in the public service of the day,” said Masisi. He added that, “this will come with significant Government reforms in all public institutions. We need greater agility and responsiveness like never before in the delivery of public services.”
The Presidential COVID-19 Task Force reportedly meddled in the awarding of tenders for COVID-19, a new Public Accounts Committee (PAC) report has revealed.
The Committee expressed concern that it has noted that there are two centres for covid procurement being the Ministry of Health and the Covid Task team in the Office of the President. The report says the Committee questioned the Accounting Officer on why the COVID 19 task team is usurping the powers of the Ministry of Health by engaging in covid procurement when the Ministry of Health is the one which has the experience and mandate of dealing with the pandemic. The report says clarification was also sought on why direct appointment is the preferred method for covid procurement.
“In her response the Accounting Officer stated that the task team was mainly engaged in the procuring of quarantine facilities and was assisting the Ministry of Health due to the heavy workload brought about by the COVID 19 pandemic,” the report says. The report says the Accounting Officer further stated that direct procurement was used because COVID 19 was treated as an emergency and that procurement was mainly from companies that have been traditionally used by the Ministry of Health.
“This however, is not the case as there has been report of new companies being awarded COVID -19 contracts. The use of direct procurement method should only be used in exceptional cases as it’s a non-competitive method which increases the risk of inflated pricing and close relations with particular suppliers to the detriment of others,” the report says.
It says since most covid procurement fell under emergency, there is need for openness and transparency regarding the procurement. The PAC recommended that in order to ensure transparency and accountability all COVID 19 related procurement should be periodically published in the PPADB website giving full details of the companies receiving procurement contracts and the beneficial owners of the companies.
It says with the passage of time the impact of covid is no longer unexpected so direct awards should gradually be abandoned as the medium and long-term needs of the pandemic can now be predicted. “Judgement should be used even during direct awards to ensure that prices are not higher than the market prices,” the report says.
In a related matter, the report says the Central Medical Stores (CMS) was unable to cater for the required quantities of medical supplies with order fulfilments of about 35% resulting in shortages and insufficient drugs to Athlone Hospital and the surrounding clinics. “In his submission the Accounting Officer had indicated that CMS was unable to supply the exact quantities required by the hospital and surrounding clinics due to the fact that supplies from CMS have to be rationed in order to cover other facilities around the country,” says the report.
The committee expressed concern about the inadequate supply of drugs to government facilities which puts the lives of patients at risk due to non- availability of essential supplies. It recommended that the Ministry identifies and prioritise measures that need to be taken to ensure that there is adequate supply of essential medicines which are needed in the public health system.
Meanwhile the report says the Ministry of Health and Wellness coordinates the operations and functions of some institutions which receive government subventions and secondment of staff from the government. These institutions include 10 NGO’s, two mission Hospitals, three mission clinics and two schools of Nursing.
It says in its endeavour to enhance efficiency and effectiveness of government support to NGOs the Ministry of Finance and Economic Development developed some Policy Guidelines for Financial Support to Non- Governmental Organisations. According to the PAC report, the guidelines were meant to ensure that there is consistency, accountability and transparency in administering public funding to NGOs. However, the Ministry of Health did not comply with the very important guidelines.
“The main areas of non-compliance were the following: (i) There was no Evaluation Committee to vet proposals from NGOs, in some instances NGOs had formed part of the evaluation forum when their requests were being considered,” the report says. It says there was continued funding of NGOs even when they failed to submit narrative and financial progress reports; and (iv) Continued funding of NGOs that failed to submit audited financial statements and management letters as required. The Committee expressed concern at the lapses in the administration of grants by the Ministry despite the large sums of public money awarded to these NGOs.
The Kasane Regional Magistrate Court refused this week to rule on whether three Namibians and their Zambian cousin shot dead by members of the Botswana Defence Force (BDF) were in possession of a rifle or not prior to their deaths.
Ruling in favour of the BDF members, Regional Magistrate Taboka Mopipi who presided over the inquest said, “It is acknowledged that no rifle has been produced before court to confirm that indeed the deceased were armed and or that there was indeed a gun shot.” She said the evidence before the court is that search for the rifle(s) that allegedly triggered the gunfire exchange was done by both Namibia and Botswana SCUBA divers and nothing was found. She said when the said search was done, an area of search was demarcated around the scene area which was partly searched due to water animals such as hippos that launched an attack at the area during the search.
“The search was therefore never concluded. This therefore leaves a gap. To that end, the area not extensively searched, the court cannot make a finding whether the rifle in issue was there or not. This is a very crucial piece of evidence,” added Mopipi. She said the joint search did not conclude the exercise and I cannot properly make a finding of fact adding that that the rifle was there as the BDF allege can therefore not be ruled out.
The deceased are Martin Munilweye Nchindo, Ernest Nchindo, Tommy Sinvula Nchindo and Sivula Munyeme. The four deceased persons died on the night of the 5th November 2020, in the waters of the Chobe River (Southern Channel) near Sedudu/Kasikili Island in Botswana. Mopipi said the incident took place at night, in a gloomy atmosphere and that as at the time, movement in that particular area was restricted and or not permitted.
She said it was the evidence of some of the witnesses that the injuries as observed on the four deceased reflected that they were brutally assaulted and or beaten either before or after being shot. “Their evidence gained support from Witness 34, Dr. Bithoma Thotho Amis who observed post mortem on behalf of the families of the deceased and Government of Namibia. This witness however conceded during cross-examination that the injuries as observed have been caused by other contacts and or impacts such as falling and hitting the hard surface of a wooden canoe,” said Mopipi.
She emphasized that inquest proceedings have very serious consequences and therefore, whatever evidence brought before court must be produced by persons of right qualifications particularly the post mortem report which the court has to rely upon. “The qualification of the expert is crucial in determining the credibility of the report. Upon assessment of both experts, I am inclined to adopt the reports from Witness 18, who is a qualified pathologist. A closer look at the other report indicates that the author, Witness 34 is not a qualified pathologist and it is meddled by issues outside an expert opinion,” she said.
Mopipi said reports compiled by a consultant Forensic Pathologist Dr. Kaone Panzirah-Mabaka show the causes of death as follows; Sivula Munyeme, gunshot injury to the chest and extremities, Martin Nchindo, gunshot wound to the abdomen and pelvis, Ernest Nchindo, multiple gunshot injuries to the chest and extremities and Tommy Nchindo, gunshot wound to the chest and abdomen.
“Medical evidence therefore prove conclusively that the four deceased persons died due to gunshots injuries. It is undisputed that the injuries were inflicted by seven (7) members of the Botswana Defence Force; Lieutenant Moreri Kenneth Mphela, Sergeant Ndingisano Nfazo, Sergeant Puisano Pistor Kgokong, Private Mbikiso Tafila, Private Emmanuel Moganetsi Majuta, Private Barulaganyi Rannosang and Private Oromilwe Motlhabi,” said Mopipi.
Mopipi found that there was a gunshot from the direction of the men to the direction of the BDF section. “The BDF members retaliated and returned fire. This was done in accordance with Standard Operation Procedures (SOPs) within the BDF. According to the SOPs, in case a soldier is being fired at, they fire back and do not have to wait for a command,” she said. She added that “The gunfire exchange was brief and after it ceased, they used a torch to light where the men were and established that all the four men were motionless, two in one canoe, one in the other and the other man lying on the edge of the river on the Island.”
She said, “The evidence of the witnesses is that, when they followed the intel, the intent was to conduct an investigation. There was clearly no intent on their part to shoot the deceased, they did that as an act of retaliation.”