BCL secures govt guarantee for bail-out

Ivy Matlho | Friday January 15, 2016 18:00

BCL Mine is hoping government comes to its rescue again PIC: KEOAGILE BONANG

Addressing residents here on Wednesday, Selebi-Phikwe East legislator, Nonofo Molefhi revealed that government had written to banks asking them to bail out BCL Mine. Declining to reveal the amount the company had asked from government, Molefhi, who is also the Infrastructure, Science and Technology minister, said as the sole shareholder, government was willing to support BCL Mine.

The minister said the guarantees were granted despite BCL Mine owing its shareholder P2 billion.

Government is the sole shareholder of BCL Mine, having taken up the last remaining stake held by Norilsk Nickel a few years ago.

“BCL is facing a financial crisis and to help in the situation, government has written letters to banks requesting assistance,” he told residents.

“BCL Mine made little profits from copper and nickel, and if it was not for the government’s help, it could have long shut down.

“If BCL fails to pay the loans, then government will take responsibility and pay.”

He added: “BCL management is expected to meet banks soon to submit their proposals”.

Molefhi said the mine was saddled with debt, which had resulted in some companies refusing to ‘partner’ with the Selebi-Phikwe landmark.

Molefhi called on the Botswana Mine Workers Union (BMWU) and BCL management to work together, saying any disharmony could result in banks being hesitant to extend support.

“It is important for BMWU and BCL to work together as failure to do so will result in slim chances of banks helping BCL,” he said.

Molefhi said BCL’s troubles began in 2014 when base metal prices collapsed.

He said the situation had been worsened by the delays in the major smelter shutdown last year, which resulted in the company having to divert money for operations towards smelter maintenance.

The minister warned that should BCL continue to face challenges, it could be forced to retrench.

“We have to understand that if BCL continues to have low profits it may be forced to retrench some of its employees. If it cannot come up with other ways of ensuring that it sustains itself, then there are chances that it could shut down leaving many people without jobs,” he said.