Mphathi-led firm seals BCL revival deal
Mbongeni Mguni | Monday October 4, 2021 06:34
PNRB, a subsidiary of Canadian nickel developer, Premium Nickel Resources, is targeting the closing of the transaction and transfer of ownership of the assets within 120 days, Mmegi has learnt.
As at Press time yesterday, the value of the transaction had not been disclosed, but Premium Nickel Resources previously said it expected to raise $400 million (P4.5 billion) in funding to bring the mine infrastructure up to the commissioning stage.
Yesterday evening, Mphathi, who led BCL Mine between 2003 and 2010, said a “definitive asset purchase agreement” had been executed with the liquidator.
“The signing of the purchase agreement is yet another encouraging milestone for the company and Botswana,” Mphathi said in a statement yesterday. The redevelopment of the former BCL assets is named the 'Tsholofelo Project', in recognition of the hope it carries for the people of Selebi-Phikwe and the region. Once the transfer of ownership of the assets to PNRB has been finalised, the company will start an extensive exploration programme to fully understand the size and character of the remaining resources. “PNRB will then be able to better optimise its investment towards the creation of a modern low-cost producer of Ni-Cu-Co and the support of a sustained economy for the Selebi-Phikwe region,” said Mphathi.
BCL Mine closed in October 2016, weighed down by high operational costs, bulging debt and low base metal prices. At least 4,300 workers lost their jobs while the Selebi-Phikwe economy collapsed as incomes from mineworkers and procurement by the mine disappeared.
Earlier this year, PNRB was unveiled as the preferred bidder to take over BCL Limited’s assets, which also include Tati Nickel Mine near Francistown. Mphathi said talks were ongoing for Tati Nickel as well.
“PNRB is also negotiating a separate asset purchase agreement to finalise terms for any prioritised Tati Nickel Mining Company assets that may be purchased,” he said.
During his years in Selebi-Phikwe, Mphathi earned a reputation as the man who could keep BCL running. In 2008-2009, during the global financial crisis, his strategy, known as ‘Survival 225’ carried BCL through the steepest drop in prices recorded by then. He often made unpopular, tough decisions with workers, but with the mine collapsing in 2016 and burying Phikwe’s economy with it just six years after his departure, Mphathi has become a folk hero in the north-eastern town.
The former BCL general manager said PNRB was led and supported by a skilled team with strong financial, technical and operational expertise to take an asset from discovery through exploration, feasibility study, mine development, to production.
“The PNR/PNRB team have worked on over 100 projects collectively, cumulating over 400 years of resource discoveries, mine development and mine re-engineering experience on projects like BCL,” he said.
Mineral Resources, Green Technology and Energy Security minister, Lefoko Moagi said PNRB would spend $25 million further exploring the two shafts it had purchased. He said the next few months would involve the company firming up its studies at the mine and securing regulatory processes.
Moagi also revealed that PNRB was scheduled to make an offer for the Selkirk Mine assets at Tati within the next 30 days.
“Batswana will see jobs opening and with the prices of base metals at their current high levels, we are hopeful that the efforts will succeed,” he said.