The rise and fall of African Copper Mine
Koketso Kgoboge | Friday April 22, 2016 10:11
Directors of the mine quickly named their operation ‘Mowana’ (Baobab), which was a tree within the mine property. Baobab is also abundant in Dukwi and nearby areas.
The news that the government had issued a mining licence to African Copper raised much optimism among the residents of Dukwi and its environs. Until then, Dukwi was a sleepy village, which was only remarkable for hosting political refugees mainly Namibia, Somalia, Zimbabwe, Angola, Mozambique, the DRC and others.
Higher optimism among Dukwi residents was not a phenomenon unique to them. Usually, when a mine is set up, it is almost inevitable that it will economically improve the lives of neighbouring communities.
Most of the residents started positioning themselves to benefit from the mine. Some of the overly optimistic built houses in order to earn income from renting them to those working in the mine. Shop owners also expanded their businesses in a bid to benefit from the windfall brought by the mine.
Towards the middle of 2008, the residents’ hopes about the mine came true. The mine was commissioned and its workers, mostly from companies the mine had subcontracted, immediately began renting houses from residents. Business also started booming in the village as a result of the influx of mine workers.
Rural/urban migration, which is a norm in many villages across the country, was minimised in Dukwi as some residents, particularly the youth, gained jobs directly or indirectly from the mine.
By then Dukwi had shed its status as a home for refugees. The village now became synonymous with job seekers who thronged the Central District village hoping to gain employment from the mine or subcontractors. To many, Dukwi had turned into the biblical ‘land of milk and honey’.
African Copper shipped its first 800 tonnes of copper in September 2008. However, it was not all rosy for the mine. The mine started operating just when the credit crunch that had pushed commodity prices down globally, had started taking shape locally. As a result there were constant operational delays fuelled by low commodity prices.
The first real sign that the mine was not in good health emerged in January 2009. Mowana was placed under temporary care and maintenance for three weeks due to working capital deficits, fuelled by low commodity prices. Employees were forced to go on accrued leave.
Despite unfavourable economic conditions, Mowana and its sister mine Thakadu struggled on, mainly thanks to numerous bail-outs from parent group, ZCI.
By March 2015, African Copper had a multi-million pula debt to its major shareholder ZCI. As a sign that the African Copper was struggling, the mine also announced in May 2015 that it would cease trading on the Botswana Stock Exchange (BSE) because of low demand for its shares.
In November last year, African Copper finally gave up the fight to continue mining at Mowana. This was after one of its contractors ‘Diesel Power’ applied for Mowana’s liquidation over a P47 million debt. In 2014, Diesel Power agreed to a deal worth approximately P1.2 billion to do mining works for Mowana over a period of 52 months.
The liquidation left over 400 Mowana workers jobless and instantly killed the economy of Dukwi.
To many, the news that the mine had closed meant shattered dreams. Kgosietsile Mbaiwa (37), a father of four is one of them. After years without a full time job, Mbaiwa was finally recruited at the mine; a development he says greatly improved his life.
“I started as a casual labourer in 2012 and got promoted to the position of plant operator in July 2013,” a visibly sad Mbaiwa said.
“I got married while working at the mine and built a two and a half house for my family. I also managed to buy a car for myself.”
Mbaiwa says that the mine closure was like a trainsmash to him.
“I am swimming in deep debts. I have not been maintaining my personal loan account since I lost my job. Bank officers have been calling me demanding that I pay my outstanding loan balance, but I do not have money. It is a painful experience.
“I am the sole provider for my family, but since the mine closed, the going has been tough. I now survive through menial jobs. My wife at times gets picked to work at Ipelegeng (government’s short term employment programme), but that is not enough to sustain the whole family.”
Another former Mowana employee, Thulaganyo Botshome, 29, shares Mbaiwa’s sentiments.
“I came to the mine fresh from vocational school in December 2008. I worked as a Fitter Mechanist. My life greatly improved while I was working there and I managed to invest a significant amount of money for myself as well as build a house at my home village (Molepolole),” he said.
Botshome, a father of one, is tapping into his savings to survive, but says that they are getting depleted and fears for the worst. He is however, optimistic that the mine will re-open soon.
“I took all my belongings to Molepolole and decided to seek refuge from a friend here with the hope that a new investor might buy the mine and we will be able to go back to work. Life has become more difficult by the day,” he said.
The business community has also been deeply affected by the closure of the mine. Prominent Dukwi businesswoman, Mmapula Maja who is also the former area councillor, witnessed her business spectacularly collapsing following the closure of the mine.
Maja, 55, who owns Middle Mines General Dealer and Hardware said: “When the mine was commissioned, I incorporated a small restaurant within my general dealer. At its peak, the mine and its contractors as well as individual employees would place meal orders quite often. Most of the miners also did their groceries in my shop. Business was booming.”
“Since the mine closed, there is literally no business. I have cut my employees at the general dealer from eight to two. I am lucky because I operate from my building and I don’t pay rent. All the businesses that rented buildings have since closed since the mine collapsed.”
Maja said that she and her two children went into the real estate business in a bid to tap into opportunities brought by the mine but their dreams were shortlived.
“The houses we built are now not occupied. Other residents who built houses in order to benefit from the mine have suffered a similar fate,” she said.
Mmegi also toured Dukwi and discovered many unoccupied houses and closed businesses. Most businesses and residential plots belonging to most of those who were hoping to benefit from the mine, have since been abandoned.
Another youth businessperson Rebabonye Makwala also decried that his business has gone down as a result of the mine closure. Makwala operates a tyre services business called V&J.
“I used to service the mine and its sub-contractors. My client base has really gone down and I have since retrenched two workers. I now have one worker. Other youth-operated ventures ended up closing after the mine ceased operating. Although I do not have figures, my business has really gone down,” said the 29-year old father of one.
The Village Development Community (VDC) was also deeply affected by the closure of the mine.
“The mine used to contract us (VDC) for some minor maintenance works. We hired youth in the village to do the works.
“Apart from creating employment for the youth, we also managed to effectively carry our mandate of supporting government with some development initiatives, with the money we earned from doing works for the mine. Since the mine closed, it has been tough to carry out our mandate,” said Dukwi VDC chairperson, Boeyenyana Lesole.
Lesole said the mine promised to build 50 houses as part of its initiative to leave a lasting legacy to the village, but it abandoned the idea due to financial difficulties.
For his part, Dukwi councillor Thatayaone Kehitile said unemployment has hit the village very hard as a result of the mine closure.
“The youth are now competing for opportunities with elders at Ipelegeng. Before the mine closure, Ipelegeng was dominated by the elderly,” Kehitile said.
The councillor is worried that there was no proper communication before the mine was closed.
“We are still awaiting for senior government officials to inform us about the future of the mine. We hope they will communicate soon. We plan to approach them if they do not communicate with us,” he said.
Although the residents remain optimistic that the mine will soon find new owners, Price Waterhouse Coopers (PWC), who have been assigned to coordinate the liquidation process maintain the opposite.
In a short response to an inquiry by Mmegi recently, Butler Phiri, PWC managing director said: “We recently emerged from a first creditors meeting where parties owed by the mine ascertained their claims and agreed on the distribution of the proceeds from the liquidation among others hence it is still early to talk about the mine finding a new owner. Once there is notable progress regarding the liquidation process, interested stakeholders will be notified.”
However, the mine may not go through a formal liquidation process. According to Butler more than three mining companies have expressed interest in buying Mowana.
Butler said that though formal liquidation of Mowana is yet to start, under some circumstances potential buyers can table offers to buy the mine. If the buyers’ offer meets creditors demand then the mine can be sold without having to go through a formal liquidation process.
“Though no company has tabled a formal offer to buy Mowana, there has been a lot of interest to buy the mine. More than three companies have expressed interest to buy the mine. The companies are from Botswana and abroad. If any of them tables a formal offer we will give it to the creditors for consideration then we will take it from there,” Phiri said.