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Companies feeling COVID-19 job nausea

Information gathered by this publication is that some local companies are now crying foul as the pressure that hit business activities around the world after the global declaration of the covid-19 pandemic, shutting down of borders and resultant lockdowns around many economies.

With lockdown came State of Emergency, companies and government seem to have imbibed the clarity of the ‘Emergency Powers (COVID-19)’ which pronounced that, “businesses will not be able to retrench or dismiss workers during the COVID-19 State of Emergency.”

However, WeekendPost has been receiving information showing that companies are already feeling nauseated by Emergency Powers in its second month. The companies claim that covid-19 financial impact signs are already showing on them, and they are showing symptoms of vomiting jobs out.

One of the first symptoms would be a letter written by Lucara mine partner Trollope Botswana to workers, a recent notice asking for a dialogue with employees regarding a planned or imminent retrenchment.  Trollope Botswana was engaging its workers on a “Retrenchment Package” before “finalising the exit package for retrenched employees.”

However, this seems to be not proximal to the 21th March 2020 Tripartite agreement entered between the Government of Botswana, Business Botswana and Trade Unions, which was against any form of laying off employers or cutting of jobs.

In another case which could lead to a company spillage of jobs, close to 300 jobs held by the South African clothing retail company Edcon, hangs on uncertainty as the owner of Jet and Edgars is waiting for a white knight investor as it is on the brink of collapse.  Edcon has been in business for nearly 90 years and is operational across South Africa, Namibia, Botswana, Lesotho, Swaziland, Mozambique, Ghana, Zimbabwe and Zambia.

The dreadful axe of retrenchment, especially in the job insecurity laden private sector, is facing 22 000 Edcon workers in South Africa. Last year, Edcon Spokesperson confirmed to this publication that anything that affects South African shops will come down on its 30 Botswana stores.

That was the time when Botswana jobs hung in balance in March of last year, before Edcon was bailed out with R2.7 billion. But this year, Edcon is pressed face down with more than P2 billion in debt and is currently suffering from a lockdown hangover from the Botswana and South African economies.

Botswana Federation of Public Private and Parastatal Sector Unions (BOFEPUSU) told WeekendPost that it has received grievances of the concerned workers at Edgars and other retailers. BOFEPUSUS calls this “a sad situation.”

Another case for BOFEPUSU regarding cut of jobs, which the federation refers to as “untidy, un-procedural and unethical” ongoing retrenchment is at Ericsson Botswana.

In a letter seen by this publication written on 25 May 2020, BOFEPUSU says the workers at Ericsson Botswana had tried to compromise by negotiating down their salaries fearing loss of their jobs but the company was not willing to give an ear. Workers wanted to know the validity of retrenchment and even asked information on the company financial performance to substantiate reasons for retrenchment, but that was concealed.

According to Motshegwa, Ericsson Botswana was reported to Commission of Labour. The federation said it was concerned by the increasing number of retrenchments in the country, “most of which are reckless and not genuine and the whole problem is that workers are thrown to unemployment and poverty.’’

“We are witnessing a situation where many employees are being retrenched, and acts of unfair labour practices in the workplace. We have written to the Permanent Secretary and Minister of Employment Productivity and Skills , for a tripartite meeting of social partners (Government, Business Botswana, Federations) to meet and seriously address the issue of ongoing massive retrenchments , which is sad because employees are being condemned to abject poverty and misery.

There is rising unemployment particularly among the youth and this is becoming a national security, as more and more youth roam the streets frustrated,” said BOFEPUSU Deputy Secretary General, Ketlhalefile Motshegwa in an interview.

Motshegwa said workers in the private sector remain vulnerable as there is limited job security and “grave violation of workers’ rights.”

Most private sectors are not unionized according to Motshegwa and in case of Edcon or other workers, the federation is taking their labour issues or cases in ‘pro bono’ basis.  However the federation is working on a “strategy to mobilise these workers for unionisation, establishment of industrial councils, crafting of decent minimum standards with regard to employees conditions of service and welfare, and pursuit of workers friendly labour laws and policies,” said Motshegwa.

Motshegwa talked of a call for Unemployment Insurance Fund, calling it as part of progressive policies that shall address the issue of employment creation and social protection towards social justice.

WeekendPost also received general complaints by workers who got half salaries or were not paid at all despite working for companies who received full wage subsidies from government’s P30 million chunk.

According to the Economic Recovery and Transformation Plan released this week, government has already implemented a number of short-term economic and fiscal measures designed to stabilise the economy and provide short-term relief to affected sectors and households.

According to the document some of these measures include, “wage subsidies for 3 months for workers in firms adversely affected by COVID-19.” Government also brought a provision for deferment of profit taxes payable by firms.

But one company, Johnson Crane Hire claims to have been left out of subsidies, according to a letter seen by WeekendPost. The letter notified workers of a review of their April salaries because of “financial distress” which could lead to the company failing to “maintain business continuation” hence the cutting down of salaries.

The Tripartite agreement entered between the Government of Botswana, Business Botswana and Trade Unions allows, “employers and employees continuous dialogue in good faith on the matter to deal with emerging issues.”

According to the tripartite agreement signed two months ago, there is a provision for negotiations of arrangements such as Johnson Crane Hire and its workers, but “in good faith.” BOFEPUSU is currently observing the case of Johnson Crane Hire employees with keen interest to see if fairness or good faith prevails.

Business

The  Bulb World CEO selected for Africa’s prestigious award

22nd July 2021

The Bulb World Chief Executive Officer (CEO) and entrepreneur, Ketshephaone Jacob has been selected as a 2021 Top 50 Africa’s Business Hero.

Jacob was chosen from a pool of 12,000 applicants – many of whom are highly-skilled and accomplished entrepreneurs.

Africa’s Business Hero, sponsored by technology entrepreneur, Jack Ma, aims to identify, support and inspire the next generation of African entrepreneurs who are making a difference in their local communities, working to solve the most pressing problems, and building a more sustainable and inclusive economy for the future.

The initiative is as inclusive as possible and applications were open in English and French to entrepreneurs from all African countries, all sectors, and all ages who operate businesses formally registered and headquartered in an African country, and that have a 3 year-track record.

Every year, finalists are selected to compete in the ABH finale pitch competition and participate in a TV Show that will be broadcast online and across the continent.

The finalists will compete for a share of US $1.5 million in grant money.

The Bulb World, is home grown LED light manufacturing company, which was partly funded by Citizen Entrepreneurial Development Agency (CEDA) at the tune of P4 million, to manufacture LED lighting bulbs for both commercial and residential use in 2017.

The Bulb World operate from the Special Economic Zone of Selibe Phikwe. Early this year, The BulB World announced its expansion to South Africa, setting in motion its ambitious Africa expansion plan.

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Business

Mining production down 12 % IN Q1 2021

14th July 2021

During the first quarter of 2021, production in Botswana’s economic nucleus- the mining sector contracted by 12 percent. This is according to Mining Production Index released by Statistics Botswana this week.

The country’s central data body revealed that Index of Mining production stood at 74.4 during the first quarter of 2021, showing a negative year on-year growth of 12.0 percent, from 84.6 registered during the first quarter of 2020.

The main contributor to the decline in mining production came from the Diamonds sector, which contributed negative 11.7 percentage points. Soda Ash was the only positive contributor in the mining production, contributing 0.1 of a percentage point. However Soda Ash’s contribution was insignificant to offset the negative contribution made by Diamonds.

The quarter-on-quarter analysis by Statistics Botswana experts shows an increase of 16.3 percent from the index of 64.0 during the fourth quarter of 2020 to 74.4 observed during the period under review.

Diamond production decreased by 12.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. The decrease was as a result of planned strategy to align production with weaker trading conditions mostly linked to Covid-19 protocols restrictions.

Botswana’s diamond sector is underpinned by Debswana, the country’s flagship rough producer- a 50-50 joint venture between government and global mining giant De Beers Group. The other producer is Canadian based Lucara Diamond Corp through its wholly owned Karowe Mine which is a relatively small but significant production that has made a name for itself worldwide with rare diamond recoveries of unprecedented carat size.

On the other hand, quarter-on quarter analysis shows that production has improved, registering a positive growth of 17.5 percent during the first quarter of 2021 compared to the preceding quarter – 2020 Q4.

Though production was significantly lower in the first quarter, the two producers ended Q2 with rare diamond recoveries. Debswana early last month found the world’s third largest gem diamond – weighing 1098 carat at Jwaneng Mine, its flagship gem quality diamonds producer, also regarded the world’s richest diamond mine.

A week later Lucara  announced its second biggest recovery, the 1174 carat clivage near-gem dug from its Karowe Mine. The diamond is the world third in carat size after the plus-3000 carat Cullinan found in South Africa back in 1905 and the 1758 carat Sewelo unearthed at its Karowe mine in 2019. Debswana and Lucara are investing billions of pulas in underground mining projects to extend the life of its mines, Jwaneng & Karowe respectively.

In terms of Gold which is produced at Mupani mine near Botswana’s second city of Francistown output decreased by 17.9 percent during the first quarter of 2021 compared to the same quarter of the previous year.

Similarly, quarter-on-quarter analysis reflects that production decreased by 21.4 percent during the first quarter of 2021, compared to the preceding quarter. The decrease was as a result of the deteriorating lifespan of the mine as well as the impact of COVID-19 which slowed down the mining activities.

Soda Ash production increased by 11.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. In terms of quarter-on-quarter Soda Ash production also showed an increase, picking up by 2.1 percent during the period under review. The increase in production is attributable to the effectiveness of the plant following refurbishment which occurred in the third quarter of 2020.

Salt production decreased by 34.0 percent during the first quarter of 2021, compared to the same quarter of the previous year. Similarly, the quarter-on-quarter analysis shows that salt production registered a decrease of 32.9 percent during the period under review. Both salt and Sodash are produced by partly government owned Botswana Ash (BotsAsh) operating from Sowa town near Makgadikgadi pans.

Coal production decreased by 11.2 percent during the first quarter of 2021, compared to the corresponding quarter of the previous year. The decrease was attributed to the reduced demand from Morupule B Power Station following the remedial works being undertaken, as one boiler was in operation during the period under review.

Although production fell, Statistics Botswana says there was no shortfall in supply of coal due to stockpiling. On the other hand, the quarter-on-quarter comparison shows that coal production increased by 20.4 percent compared to the preceding quarter.

Botswana’s flagship coal producer is Morupule Coal Mine; a wholly state owned mining company located in Palapye producing primarily for Botswana Power Corporation (BPC)’s power generation plants Morupule A & B.

The other coal producer is Botswana Stock Exchange listed Minergy which operates a 390 MT Coal Resource mine in Masama near Media in the southwestern edge of the Mmamabula Coalfields.

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Business

Gov’t awards mining licence for Gantsi Copper Mine

14th July 2021
Moagi

Department of Mines in the Ministry of Mineral Resources, Green Technology & Energy Security has awarded mining licence to Tshukudu Metals-a subsidiary of Aussie firm Sandfire Resources ,giving the company a green light to start piecing the ground at its Motheo Copper Project near Gantsi.

Lefoko Moagi, minister in charge of mineral resources in Botswana confirmed to weekendpost on Tuesday. Minister Moagi revealed that “the licence has been approved , but Sandfire Resources as a listed company will report to its shareholders and investors then make an official public statement” he said.

Based on a forecast copper price of US$3.16/lb (reflecting current long-term consensus pricing) the Base Case 3.2Mtpa – Ghantsi copper project is forecast to generate US$664 million (over P7 billion) in pre-tax free cash-flow and US$987 million (over P10 billion) in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations.

In December 2020, the Board of Sandfire Resources approved the commercial development of the Motheo Copper Mine located in the Kalahari Copper Belt in Botswana, marking a key step in its transformation into a global, diversified, and sustainable mining company.

Tshukudu Metals Botswana (Pty) Limited (Tshukudu) a 100% owned subsidiary will be the owner and operator of the Motheo Copper Mine which is scheduled to produce up to 30,000 tonnes per annum of copper in concentrate over a 12 year mine life.TMB is targeting development of its Motheo Copper Mine in 2021 and 2022, with its first production in 2023.

GOVERNMENT NOT TAKING UP 15 % STAKE ON OFFER

Beginning of this year presentations were made to the Department of Mines as part of the Mining Licence approval process and to the Ghanzi Regional Council, additional information was requested by Department of Mines in April and was duly supplied by the company.

As part of the Mining Licence approval process, the Government of Botswana has a right to acquire up to a 15% fully contributing interest in all mining projects locally. Quizzed on whether government through Mineral Development Corporation Botswana (MDCB) would be taking up stake in the project Minister Moagi said, “No consideration is being made on that regard”.

“Government is not considering taking up a stake in the Ghantsi Copper Mine project, every opportunity is assessed on all risks, but Government makes money all the while from leases, taxes and royalties, remember if you take stake you are liable for liabilities of the project as well,” Moagi said.

MINING CONTRACT

Last month Sandfire announced that it has awarded over P5 billion worth mining contract to African Mining Services (AMS), a subsidiary of Perenti, to deliver the open cast operation.

The contract, which has an estimated value of US$496 million (over 5 billion), is the largest single operational contract for the new Motheo Project covering a period of 7 years and 3 months, with provision for a one-year extension.

The contract according to Sandfire Resources was awarded following a competitive 3-stage tender process which saw a number of key factors taken into consideration when selecting the preferred contractor.

These included Citizen Economic Empowerment, safety culture, equipment suitability and availability, commercial terms and identified improvement opportunities. Under the terms of the contract, AMS has agreed to form a 70:30 Joint Venture with a suitable local Botswana partner or partners.

The JV is expected to be finalized ahead of commencement of mining in early 2022. African Mining Services has been operating in Africa for over 30 years. AMS’ parent company, ASX listed diversified mining services group Perenti, already has a presence in Botswana through Barminco, their underground mining division, at the large-scale Khoemacau Copper Mine located 200km north-east of Motheo.

Last month Sandfire executives said the award of the open pit mining contract represents another key milestone in advancing the Motheo Project towards production, with all components of the contract in line with the key parameters outlined in the December 2020 Definitive Feasibility Study (DFS).

The company said full-scale construction of the US$279 million (over P 3 billion ) mine development is expected to commence immediately upon receipt of the Mining Licence, with mining scheduled to commence in early 2022 ahead of first production in early 2023. This week Sandfire Resources advertised over 10 positions in calling on applications from geologists, mining engineers and geotechnical engineers.

The Motheo mine has an initial mine life of 12.5 years based on production from the T3 pit. The initial development is expected to generate approximately 1,000 jobs during the construction phase and 600 direct full-time jobs during operations, with at least 95% of the total mine workforce expected to be made of up of Botswana citizens.

Later in the week Sandfire Resources announced in the company website that it has received the licence. Sandfire’s Managing Director and CEO, Mr Karl Simich, said the award of the Mining Licence represented a major milestone that would see a significant increase in construction and development activities on site.

“We are absolutely delighted to now be in a position to move to full-scale construction at Motheo, with our construction crews expected to mobilise to site over the next few days. I would like to thank the Government of Botswana for their support throughout the approvals process, which will see Motheo come on-stream in 2023 as one of very few new copper mines commencing production globally.”

Simich said the project is expected to generate approximately 1,000 jobs during construction and 600 full-time jobs during operations, and represents the foundation for Sandfire’s long-term growth plans in Botswana.

“Our vision is that Motheo will form the centre of a new, long-life copper production hub in in the central portion of the world-class Kalahari Copper Belt, where we hold an extensive ground-holding spanning Botswana and Namibia,” he said.

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