Botswana reels from copper mine closure

By Mpho Tebele

GABORONE- THE Botswana government’s decision to place its oldest copper and nickel mine, BLC, under liquidation is going to dent the country’s economic growth, analysts warned this week.

Apart from traders and supermarkets operating in the mining town of Selibe Phikwe and families of more than 6,700 employees, BCL is also a customer of government utilities.

BCL consumes about 20 percent of total electricity usage in Botswana or 43 percent of Botswana Power Corporation (BPC)’s own power generation. BCL is a major consumer of Water Utilities Corporation (WUC)’s water supply and Morupule coal.

Official figures show that in the past three years, the utilities in question raked more than P3.4 billion from BCL.

WUC spokesperson, Matilda Mmipi, said while they do not anticipate any job losses, the closure of the mine is going to affect their profits.

“BCL consumes 16 million litres of water every month and not having them as our customer is likely to impact on our profitability,” she said.

Moatlhodi Sebabole, the economic research manager at First National Bank of Botswana (FNBB), said the closure of the mine is set to affect the economy in more ways than just the loss of employees of the mine.

Research manager at FNBB Moatlhodi Sebabole said closing down a mine of this size means a lot of businesses that are connected to the mine will also feel the effect of the loss in business.

Sebabole added that the BCL mine has been the only existing lifeline of the economy of Selibe Phikwe, and as a result of the closure, the livelihood of the Selibe Phikwe people in northern Botswana where the mine is located is threatened.

Sebabole further said for Selibe Phikwe to not become a ghost town, there is need to ensure that other projects in Selibe Phikwe rise to the occasion in order to stimulate the economy.

The voice of the private sector, Business Botswana’s Chief Executive Officer Lekwalo Mosienyane, said: “We note that the decision to close these mines will have implications on the wider business community in both Selibe Phikwe and across Botswana.

“As a consequence, Business Botswana has appointed a task team to look into the BCL and Tati Nickel Mines (subsidiary) and suggest a way forward. Business Botswana stands ready to support and cooperate with the government, liquidator and the other interested parties in the search for a viable long term solution. We note that time is of essence and the matter is highly prioritised.”

Chamber of Mines Chief Executive Officer, Charles Siwawa, said the hope within the mining fraternity is that whilst the operations are temporarily closed, there will be entrepreneurs out there who could find this business entity appetising enough for them to inject the required capital and get the mines operational once more.

“The country has experienced closure of base metal mines in the recent past and it is important to note that they have exchanged ownership after going through a similar process. There is reason to believe that with such infrastructure at BCL Group of mines that has been in existence for decades and fully serving the community around the operations, together with the available mineral deposits these mines should be attractive enough to any investor in the open market,” he said.

Main opposition political party Botswana National Front spokesperson, Justin Hunyepa, said while thousands of workers are also employed in several shops, banks, contractors, public and private schools, they are directly and indirectly connected to the BCL mine.

He said closure of the mine will trigger a litany of challenges not on job losses only, but other socio-economic issues.

“There should have been extensive consultation on the closure where the stakeholders, especially the workers and town residents are engaged to chart the way forward in a humane and less painful manner, in line with the country’s vision of a compassionate, just and caring nation,” said Hunyepa.

Minerals and Water Resources minister Advocate Sadique Kebonang said the liquidator Dixon Warren will submit his finding to the High Court on the February 7, 2017.

The Chairman of government owned Mineral Development Company, Reginah Sikalesele-Vaka said 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.

October 2016
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