Government has failed to rescue BCL from its deadlock with Norilsk over the stagnant P3 billion Nkomati deal. Minster of Mineral Resources, Green Technology and Energy Security Advocate Sadique Kebonang has revealed that Minerals Development Company Botswana (MDCB) executives met with Norilsk Executive in London recently to speak about the Norilsk deal. Unfortunately, the negotiations were not fruitful, Advocate Kebonang stated without giving details.
The minister explained that MDCB executives told him that Norilsk insisted on the terms of the agreement. “They insisted on the deal which led to it collapsing. That is what I was advised on. Anything else is speculative”, the minister said. BCL find itself between a rock and a hard place as the acquisition of Nkomati Mine has not been finalised as BCL could not pay the P3 billion worth of the 50 percent stake. BCL Mine, through its Polaris II strategy aimed at diversification agreed with Norilsk Nickel to purchase a 50 percent stake in Nkomati Mine, BCL had agreed to pay US337 million in cash to Norilsk Nickel to acquire both Tati Nickel Mining Company and a 50-percent stake in Nkomati Mine. While Tati Nickel has been acquired, Nkomati is still owned 50 percent by African Rainbow Minerals (ARM) and Norilsk Nickel.
Minister Advocate Kebonang who was responding to a question by Selibe Phikwe West MP Dithapelo Keoraptse dismissed claims that MDCB executives have messed up the deal with Norilsk. Keorapetse had argued that according to information from BCL, Norilsk never asked for P3 billion as once off payment and BCL management had negotiated an easy and achievable payment terms but MDCB executives messed up the deal when they insisted on the less than P3 billion. “Part of the plan was obviously to pay Norilsk the P3 billion from the Nkomati concentrates and part of the profit from smelting of the Nkomati concentrates”, said Keorapetse. The minister however argued that government was never misled by MDCB. He said BCL was not profitable and there is no how it could have managed to pay the P3 billion.
“BCL sought P1 billion loan guarantee from the Government and the Government did that through Barclays Bank. A few months later, they sought another billion Pula which they said, ‘give us a billion Pula in September and give us another billion Pula in March.’ In a space of less than a year, the total amount that was sought by the BCL was P3 billion. BCL as a company has never made P3 billion. At the time when the commodity prices were very high, it never even reached P3 billion”, Advocate Kebonang said. BCL has been placed under provisional liquidation for four moths after which the liquidator would report back to the High Court on the way forward about BCL Mine in Selibe-Phikwe and its subsidiary Tati Nickel Mining Company in Francistown. BCL mine had around 4300 employees while TNMC had close to 700 employees.
BCL Board Chairman Dr Khaulani Fichani last month told a press conference in Gaborone that the acquisition of Nkomati is in principle. He stated that even though the shares have been signed off, the actual transaction has not taken place. “Where we are now is that we have to pay and we are given the shares. We are unable to go ahead with conclusion of the deal because of what we find ourselves in today. When we engaged Norilsk Nickel to purchase a 50 percent stake in Nkomati Mine we had a clean balance sheet. It is only that the process took long because this was not a one man’s deal- a lot of experts were involved. At the time when the deal was being sealed things were not looking good for BCL”, explained Dr Fichani adding that the Minister of Minerals in South Africa signed off the shares in August this year.