Diversification drive gains momentum

MQONDISI DUBE
Correspondent | Thursday July 10, 2008 00:00

 

The Minister of Finance and Development Planning, Baledzi Gaolathe said at the Selebi-Phikwe full council meeting on Monday that the government has made a commitment that the copper-nickel mining town will not die. Gaolathe said there is an exploration project to find more ore reserves and extend the life of the BCL mine that sustains the town. The BCL exploration and drilling programme, which is funded by the European Union (EU) is currently under tender and is estimated at P90 million.

Gaolathe said the contract is expected to start at the end of the year and to conclude in December 2009. 'This drilling programme will be a constituent in the final estimate of BCL life,' he said. He added that BCL has undertaken an independent social impact assessment study of the mine closure. The study will advise BCL on its social responsibility at the time of mine closure.

Gaolathe said despite efforts to extend the mine's life, it is essential to make plans for the economic diversification of Selebi-Phikwe.

If the exploration programme does not yield positive results, the mine is scheduled for closure in 2013. 'Therefore, an immediate diversification programme to attract new employment and investment into the town should be developed, with the view of minimising the resultant effect of the closure of BCL,' Gaolathe said.

The ministry  is still headhunting for a substantive chief executive officer of the Diversification Unit for Selebi-Phikwe, which has started work. Ministry of Finance deputy Permanent Secretary, Disikalala Gaseitsiwe is the acting unit coordinator.

Gaolathe said the diversification process will be funded by government in the National Development Plan (NDP 10) and the re-employment fund, which was realised after payments from BCL to the government. He said through the EU, there have been SYMIN interventions that both BCL and Tati nickel have benefited from in the form of on-lending agreements amounting to 85 million Euros.

Out of this, BCL got 78 million Euros. Gaolathe said the interventions have been in the form of a loan and two grants. He said the government is still repaying the loan while BCL has completed the repayment of the on-lending agreement capital value together with interest.

He said the government and the European Commission (EC) delegation agreed to establish the Re-Employment Account (REA) to reinvest the repayments of each SYMIN interventions from BCL and Tati.

'This account has recently been the subject of a detailed audit by an independent financial expert that has confirmed that the REA value as at December 2007 stands at P231 million,' Gaolathe said. The figure is expected to go over P500 million in 2011.

The Finance Minister said when BCL was struggling financially in the 1990s and early 2000s, capital repayments in the form of Promissory Notes were made and these are currently valued at P118 million with attributable interest at P100 million.

Gaolathe said both BCL and Tati have repayments to make to the SYMIN intervention until 2010.

He said the government will leave no stone unturned to ensure that Selebi-Phikwe survives beyond BCL mine's closure.

Nominated councillor, Benjamin Bagayi called for a national or regional conference on diversification. Gaolathe replied that a stakeholder's conference will be held on diversification.