Masama winter ‘camp-out’ ends, but questions remain
Larona Makhaiza - Mbongeni Mguni | Wednesday September 3, 2025 10:22
Masama Coal Mine, the country’s smaller colliery after Morupule Coal Mine, is yet another cautionary tale about how the cyclical nature of mining and logistics can wreak havoc on operations and workers’ lives.
Russia’s invasion of Ukraine in February 2022, triggered an energy crisis in Europe and parts of Asia which lifted coal prices to record highs, boosting the country’s two collieries, which witnessed a surge in orders within Africa and abroad.
Price increases of up to 300% at some point allowed Minergy to contemplate orders from buyers where sales were previously inhibited by the cost of logistics.
In the years since those highs, the easing of that crisis and the return of the global backlash against coal have depressed seaborne prices. While Morupule leaned back on Botswana Power Corporation as a reliable buyer, Minergy found that the breakdown of South Africa’s rail sector meant that rival producers there had flooded its former stomping ground.
Essentially for Minergy, the constraints faced by Transnet in dispatching South African coal to export markets, meant that coal producers there joined the local operation in competing for market space in that country, further depressing prices.
In addition, while Morupule Coal is adjacent to the BPC, the distance to Minergy’s potential customers presented logistical costs at a time when pricing was under pressure from the competition in the target market.
The result was that after months of sputtering along, including a work stoppage last year and change in mining contractor, Minergy finally suspended operations earlier this year.
The new contractor, Meropa Resources, which employs the workers at Masama, had to ask them to put their tools down, without clear direction of when operations would resume or any guarantees around salaries and terminal benefits.
For four months, workers went without their salaries and no word on their future.
A group of them took to camping outside the mine’s gates to ensure that assets weren’t stripped from the operation, a fear that ran rampant amongst workers.
Throughout winter, the workers kept vigil outside the gates.
During a recent meeting with Minerals and Energy minister, Bogolo Kenewendo, workers became emotional when revealing the toll of the last months on their well-being.
Kitso Molatlhiwa said the past four months had been difficult. “We have camped at the mine. “We closed that mine because a few weeks ago we saw our employers moving the machinery and we were not told anything but we will not allow that under our watch at all until our issues are solved,” he said.
For, Ontlametse Molapo, the situation at Masama is one of deep regret. She formally worked at a mine in Gantsi and had accumulated assets, but moved to Masama in search of greener pastures.
With tears welling up in her eyes, Molapo told how workers are losing their assets to creditors, while the veil of silence has fallen on their futures.
“I don't even have a year with Meropa but the problems we have are plenty. “I was in Gantsi and left that job because of this offer. “This job has now left me with nothing. “I have even lost my car,” she said.
While Minergy is technically a private company owned listed on the Botswana Stock Exchange, government has been a major non-equity supporter through loans and technical support via different agencies.
For government, coal remains a strategic mineral in the country, with the massive 200 billion tonne resource holding the promise of direct and indirect benefits. Local coal could power domestic and regional industrialisation, while further beneficiation holds the promise of petrochemicals and synthetic fuels.
At the last count, Minergy owed government-linked agencies, the Minerals Development Company Botswana (MDCB) and Botswana Development Corporation (BDC), more than P700 million.
The figure is being converted from debt to equity as a form of balance sheet restructuring that will help the colliery access further funding to rebound.
While specifics have not been provided, Minergy had a market capitalisation of about P190 million recently, suggesting that the state entities could either take controlling or full equity under the conversion.
Besides the debt financing, MDCB, the state minerals investment agency, has been charged with providing the technical support required to turn around Minergy’s fortunes.
At the recent meeting, Kenewendo pledged to clear the outstanding salary arrears within a week, using direct government resources.
“The money that will be used to pay your salaries for these past four months comes from the government,” she said. “Though the government’s coffers are under pressure, we saw it fit that the least we could do is at least to do this.”
Kenewendo and MDCB acting CEO, Geoffrey Matlhaka, pleaded with the workers to be patient as a more permanent solution is sought to lift Minergy out of its woes and back into operation.
“Currently we do not have a potential suitable investor and we have not found any. “But we are working behind the scenes to find the best suitable suitor for these mines,” the pair said.
Workers, however, frustrated after months camping in the winter cold, had more direct demands from government and the MDCB.
For many, while the settlement of salary arrears was welcome relief, the lack of a more stable solution going forward means the situation will recur. Government’s efforts, noble as they were, simply kicked the can down the road, workers said.
“I am not happy with the four months because we have more than four months waiting for us in the coming months. “I have a three-year contract with Meropa. What about the remaining months of the contract,” said Joel Mantswe.
Ronnie Herbert told the meeting that the little patience and hope they had with the mining company is hanging by a thread.
“We have long been patient with this company,” he said. “There is an issue of the 13th cheque which was included in our initial offer letters but towards the end of some of our contracts, the new contracts came and that clause was not there. “Even the Minister of Labour is aware of this.”
Several workers argued that Meropa Resources should just formally terminate their contracts and pay them their terminal benefits. For workers, this is a more stable and final solution, than waiting for boardroom solutions that may take long to be realised.
Mmegi is informed that between MDCB and government, frenetic efforts are being made to secure funding to recapitalise the coal mine and tide it over until a recovery in prices. However, by June, Kenewendo told a conference in Gaborone that coal prices were $110 below what Minergy required to break even.
The minister also added that another possibility could involve linking Masama to a power station. Traditionally, power stations are a form of value addition for coal, as the electricity generated is usually sold at a much higher unit price than the coal.
Yet another avenue is to find a takeover partner for Minergy who can inject the patient capital required to wait for warmer days.
The mine, sitting on a 390 million tonne resource, and a nameplate capacity of 125,000 tonnes of coal per month, is quiet for now, waiting for a desperately needed upturn.
For their part, the Meropa Resources workers are waiting restlessly in despair.