Suppliers Pull The Plug On Mowana Mine
Lebogang Mosikare | Monday April 9, 2018 17:01
According to the source, the mine’s supplier of fuel, Vivo Energy, and its power supplier, Botswana Power Cooperation (BPC), stopped supplying the Cradle Arc-owned mine with supplies because of outstanding debts, leaving workers in panic mode before the Easter Holidays.
It was no surprise that the workers became jittery since the closure of some mining houses around the country in recent years because of a wider commodity crash.
They had a genuine fear that they may lose their jobs again.
The source added that as a result of lack of fuel and power, which was caused by Mowana’s failure to pay its creditors, the mine management took a decision and told the employees not to report for duty.
“Nothing can happen at the mine without fuel and power, hence the management told the workers to stay at home for the rest of the Easter Holidays. As we speak, Vivo Energy has been paid and is expected to resume supplying the mine with fuel as usual while BPC will be paid sometimes this week,” said the source.
The source added that workers who are deemed critical like those who are employed to clear roads were to report for duty on Friday while others will report for duty today (Monday). He further explained that Mowana - which has not started to mine at full capacity -is expecting to get cash injections from its shareholders in order to pay its creditors.
“The mine has recently been listed on the Alternative Investment Market (AIM) and is expecting money from its shareholders. The amount of money that the mine owes its suppliers run into millions, but you should know that this is not a household debt. Although the amount is huge, mining companies can afford to pay these large sums of money,” the source explained.
Reached for comment, the mine’s general manager Sebele Molalapata said he could not comment on the issue since he was on leave.
He instead referred The Monitor to Mowana’s country director, Thuso Dikgaka who said: “Many businesses are sometimes run on credit which they later pay. It is not something unusual. Your source should understand this simple concept. If you want the truth about what happened, check our website”.
Dikgaka added that workers were told to go on extended leave during the Easter Holidays because there was a need to re-align the mine’s mill. “Unfortunately, after we re-aligned our mill it started to rain heavily and we were left with no option but to send our employees on extended leave. There was no need for the workers to report for duty to do nothing,” he said.
“See if all our workers will not be back for duty next Monday as we have planned. Workers we deem critical will report for duty on Friday to prepare the mine for their colleagues who will report for duty on Monday,” Dikgaka said, reiterating his stance that there was nothing untoward in sending the workers on extended holidays.
An international newspaper, The Business Times, quoted Cradle Arc chief executive officer (CEO) Kevin van Louw as saying that the London-listed company is ramping up production to 12, 000 per year at Mowana in order to take advantage of increasing metals prices.
Production was stopped at Mowana in 2015 because of low copper prices.
At the time, copper was bought for around US$4,300 per tonne, but has now risen to about US$6,700 per tonne since the beginning of 2016. The CEO said that Mowana has secured a security debt funding worth US$10 million to increase development of 12,000 tonnes per year over the next three to four months.
According to The Business Times, van Wouw said Mowana wants to increase its base metals exposure in Botswana.
“There are numerous assets on the block. We are looking at a number of them,” the paper quoted him saying but did not provide details.
Cradle Arc, formerly known as Alecto Minerals, relaunched with a listing on London’s AIM market for small companies in January, raising 5.65 million pounds (S$10.5 million) to support the Mowana mine, the paper concluded.