Pula Steel to prolong BCL lifespan - Mahupela
Onalenna Kelebeile | Thursday July 24, 2014 11:28
Speaking at the groundbreaking ceremony of Pula Steel and Casting Manufacturers last week, Mahupela said the mine shall remain part of Batswana’s lives and will transform the small town of Selebi-Phikwe into a true metropolis.
BCL’s copper ore is expected to significantly exhausted by 2022.
He said the steel project marks the beginning of the dream that was planted by the Vice President Ponatshego Kedikilwe who challenged the mine on what it plans to do for the town to survive.
“We put together a strategy called Polaris 11 and the Pula Steel project is part of this strategy. It forms one of six themes that we want to carry out within the SPEDU region. I pronounce that BCL is not going to die,” he said.
He said the mine’s life has been centred on copper and nickel but now they have decided to venture into the iron industry.
“This is the beginning of the dream and next time I will unfold more bigger dreams for the mine,” he added, without elaborating.
Pula Steel is going to invest a total of P89.5 million in the plant, with plans to create 1,000 direct jobs.
Officiating, Kedikilwe noted that Pula Steel is not only critical to the country’s economic development, but is also positioned to ensure immense contribution towards human capital development through skills transfer.
He added that the physical groundbreaking had to be preceded by a conceptual groundbreaking that was the restructuring of the BCL.
He explained that the mine’s restructuring entails cancellation of shareholders’ agreement and negotiating some buyout of some companies, cancellation of the tax agreement for BCL to be taxed under the normal regime and paying royalties according to the Mines and Minerals Act.
BCL also intends settling its P3.3 billion debt with government by paying P1 billion and government converting the remaining debt of P2.3 billion to equity.
“These steps paved the way for a congenial BCL balance sheet for Pula Steel and Wealth Generations Holdings to see and exploit business opportunities,” he added.
Kedikilwe praised BCL’s transformation strategy from being a single commodity to a completely diversified business enterprise.
Pula Steel is the only fully integrated steel manufacturing company in the country that will process scrap metal into different types of steel and reduce the burden on the country’s foreign exchange reserves used on imported steel.
Kedikilwe said this works positively towards contributing to the country’s balance of payments.
He noted that the plant’s main raw material (scrap metal), the total consumption of which will be 86,400 tonnes per annum, will change the previous exportation of the abundant scrap metal resource into Botswana at high volumes but low value.