The fall of Tati Nickel
Ryder Gabathuse | Friday October 21, 2016 17:45
Even in modern day life, the Tati Nickel Mining Company (TNMC) copper/nickel operation at Phoenix played a significant role in the economy of the city.
Francistown and the entire North East District (NED) still expected more from the mine despite the challenges of low metal prices and the low ore grade mined.
Therefore, over reliance of the city’s economy on mining, no matter at what scale and economic value has been a given, from way back.
This reality has left Francistown vulnerable to the dictates of the economic forces for many years and seemingly with no plan for post-mining activity in an endeavour to diversify the single commodity dependent economy. Whenever metal prices plummeted the city felt the pinch. Other than mining, Francistown’s economic activity revolves around commerce with little manufacturing.
Infact, Francistown is what it is today chiefly because of mining which was carried out at a large scale around and within the city itself. Monarch, Somerset, Phase Six and many others were mining sites that employed people from around Botswana and neighbouring countries like Zambia, Zimbabwe, Namibia, South Africa and as far as Europe.
Francistown is named after a gold digger, Daniel Francis during the gold rush era that saw Europeans traversing Africa in search of mining opportunities. City authorities are still battling today to rehabilitate some of the mining sites that were abandoned after mining activities. This in a big way reflects that from time immemorial Francistown has been a town with a mineral-led economy.
It was not by fluke that a few years ago the Francistown City Council (FCC) established a twinning agreement with the Belgian City of Genk on the basis of striking similarities the two mining town had.
The over reliance of the city’s economy on mining has however, proven vulnerable as the unreliable commodity prices have often eroded the mining’s contribution in particular the copper/nickel mining at Tati to the city economy.
Apart from the Tati mines, there is also Mupane Gold Mine, in the outskirts of Francistown just near Matsiloje as well. For sometime, this mining house has been stable, as gold prices have relatively remained stable. It is perhaps, its mining scale that does not make it a significant player on the city’s economy like Tati.
In the entire north eastern Botswana, Francistown carries the burden of single-handedly supporting major villages and rural economies with services and hope for a better life.
Anything that happens to the fragile economy of the city will always have ripple effects across the entire NED.
It is just about two weeks since the TNMC closed its Phoenix mine after it was placed under judicial management together with its parent BCL mine, as they are highly indebted. The entire NED is already feeling the heat.
Today, the retail sector, entertainment, banking sector, taxi operators, the recreational facilities like the gym, dry cleaners and every sector of the economy has been hardest hit by the mine’s closure.
It became apparent early this year that Francistown was set for bad times when a contractor, Aveng Moolmans which was contracted to carry mining at the Phoenix Mine laid off about 600 workers and wrapped up from the site, for good.
Now, about 700 workers have been affected by the recent closure. The retrenchment at both Tati and Moolmans follows about 400 employees of the Mowana Mine in the outskirts of the city. The sad thing is that more workers from the companies that were directly or indirectly contracted to the mines were affected.
The closure of the TNMC is likely to upset the FCC’s Local Economic Development (LED), which is an approach for stimulating the city’s local economy which the Mayor Sylvia Muzila said has been dormant.
“It’s critical that Francistown be recognised as a welcoming and effective city in which to conduct business and where key business elements of time and certainty are respected,” said Muzila in a recent presentation on local economic development strategy.
Muzila was worried by high unemployment rate, poverty, low industrial activities as well as low entertainment and recreational activities.
Basing her report on the 2011 Population Housing and Census she presented the population then at about 98,961 indicating that 50% of the total population of Francistown was economically active.
The report also indicated that 18.6% of the labour force in the city was unemployed.
“As a centre of service provision for the region, urban centres like Francistown tend to have a disproportionate flow of job seekers from the outlying villages,” further reads the LED strategy report.
The report also emphasised that unemployment rate for Francistown was high even though it is slightly lower than the national average then standing at about 19.9%.
The leading industries in terms of employing many people in Francistown were the wholesalers and retailing trade with 6,686 persons followed by the public administration at 4,869, then construction with 4,207 and manufacturing at 3,392.
Muzila was worried in an earlier interview that since the mines provided a high-income bracket, which elevated the miners buying power and boosted the economy of the city, its closure will have a huge negative impact on businesses and individuals who took advantage of the mines.
“The closure will impact negatively on people’s assets as they might put them for sale or rental hence forcing property markets to drop. This will also affect us as the council because we will be forced to reduce our rates,” bemoaned Muzila in a recent interview.
True to Muzila’s worries, one of the private property owners that had accommodated Tati mine employees, Horse Shoe Complex was badly affected by the TNMC closure just in the immediate period.
The company’s operations manager Bhekezela Gwebu said recently: “It was a tough decision to us as it has hit us directly into our coffers as we had a long-term contract with TNMC and they paid us very well”.
Many other property owners including the owners of complexes such as Masa, Gwizi, Nkgwana were affected. At some stage Tati employees occupied the Ngilichi village flats owned by a local entrepreneur.
All these were returned when the mine cancelled leases with its employees early this year as part of cutting costs and thereby hitting hard into the pockets of many entrepreneurs. North East District Council (NEDC) chairperson, Florah Mpetsane simply rounded the developments at the mine as “pathetic.” She was worried that many sectors of the economy in the district are going to be badly affected.
NED villages of Matshelagabedi, Matsiloje, Matopi, Shashebridge and Tatisiding, are some of the villages that incessantly benefited from the mine’s corporate social responsibility.
Explained Mpetsane: “The mine’s assistance depended on the community’s needs. I can vouch, they (TNMC) have never disappointed us”.
Timeline
1988: Selkirk Mine start operation
1995: Official opening of Phoenix Mine
2002: Production increases to 3.6 million tonnes annually
- Official opening of the Concentrator by former President Festus Mogae
2004: Activox® Demo Plant is commissioned
– Hydrometallurgy Plant
2006: Production increases to 5 million tonnes per annum - Dense Medium Separation plant (1a) operational
2007: Dense Medium Separation (1b) operational
2007: Botswana Metal Refinery groundbreaking by President Festus Mogae
2007: Purchase of LionOre by Norilsk Nickel, The TNMC Corporate Social Responsibility Programme launched
2008: Commercial (full plant) DMS
2009: First Motswana General Manager (Sebetlela O. Sebetlela, is appointed)
2014: Norilsk Nickel Mining Company vacates TNMC site
2014: Botswana government through the BCL Mine buys TNMC
2015: Aveng Moolmans vacates TNMC’s Phoenix Mine site
2016: TNMC and BCL Mines placed under judicial management