Bleak Christmas for Mowana’s forgotten workers

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The 350 workers axed at Mowana Mine this week face a nightmare festive season, with November salaries as yet unpaid, termination benefits still in the wind while landlords and other debtors bang on their doors. Staff Writer, MBONGENI MGUNI, reports on the festive gloom

The Cuprum Curse, or the tendency by fledgling copper mines to collapse due to the mineral’s inherently fickle price, has visited African Copper’s Mowana Mine, nine months after erasing 800 jobs at Boseto Mine in Ngamiland.

With copper prices at six year lows and 28 percent down in the year to date, smaller, younger mines, known as juniors, have been unable to withstand the knock on their books, resulting in first, Boseto and then Mowana’s closure.

As grim as Boseto’s closure was – where workers were shipped out at 02:00am under police guard – its collapse was softened by a later buy-out by Cupric Canyon, a private equity firm backed by Barclays Capital.

A small number of the 800 fired at Boseto have reportedly been reabsorbed into Cupric’s adjacent Khoemacau Copper Project, with more expected to be taken in as the project advances.

The permanent and contract workers fired from Mowana and its sister mine, Thakadu, have no such luck.

African Copper’s majority shareholder, ZCI Limited, has ruled out any bail-out for the time being, while government’s hands are also tied as it attends to its wholly owned BCL Mine, also suffering from the effects of the downswing in copper and nickel.

“It is a very difficult time in the industry,” Mowana Mine’s provisional liquidator, Massimo Marinelli said earlier in the week.

“People are looking at the holidays and not considering buying mines or businesses. I have not received any positive indications that anyone would want to buy the mine.”

Should a buyer or bail-out not appear, Marinelli will have to auction off Mowana and Thakadu’s assets and pay off creditors who are growing increasingly impatient, as they too eye their own liabilities and the onset of the festive season.

Meanwhile, the 350 permanent workers axed at Mowana are stuck in limbo. In separate interviews on condition of anonymity, several of them painted a picture of confusion, desperation and helplessness.

Many workers are stranded in and around Francistown, where some are on the run from landlords, while others have had their properties sealed up in their homes by landlords demanding rent. The workers last received full pay in September.  In October, some received 70 percent of their salaries, while none have thus far been paid for November.

The workers originate from as far afield as Kgalagadi District and for these, hiring a truck to transport family and property across the country, without a salary, is a frustrating impossibility.

“It does not look like we will get our termination pay anytime soon,” one worker says.

“Technically they say termination benefits can only be paid after the mine or its assets have been sold.  When that will happen, no one knows.

“As we speak, some landlords have seized former workers’ properties and are demanding their rent.

“Some of the people have been working here for seven or eight years and they have been forgotten.”

On December 11, lawyers representing the lead creditor, Diesel Power, and African Copper return to the High Court to show cause why the provisional liquidation order issued in November, should not be made final.

In plain speak, the creditors could argue for a final order, meaning stripping and auctioning of assets, or the liquidator could recommend an extension of the provisional order to allow for buy-out offers and bail-outs.

Should the court issue a final liquidation order, an auction would likely take place in the New Year and creditors would be paid according to their agreements with African Copper, often receiving a percentage of their outstanding debt.

Workers’ termination benefits or portions thereof, are among the last items to be settled.

Such an auction, will most likely take the form of a ‘fire sale’ where bargain hunters descend and grab assets for a song, without a thought about the longer term potential of the operation.

Should the provisional order be extended, the chances of a solid buy-out bid or further capital from either the shareholder or government, are equally bleak.

In a statement to Parliament last month, Minerals minister, Kitso Mokaila said the shareholder had indicated its commitment to support Mowana and maintain employment levels.

However, workers say Mokaila was mixing up commitments.

“The directors had promised government that there would be no job losses when Thakadu Mine closed in February. They did not make any such undertaking with Mowana,” another former mineworker contends.

Government is equally unlikely to extend a bailout to African Copper. Government had already deferred royalty payments in order to assist with cash flow, while also removing the obligation to pay the training levy.

In addition, government is seized with the troubles at BCL Mine, which has been battling to pay salaries, suppliers, contractors and other obligations due to the depression in base metal prices.

Whatever the outcome the workers will be the losers. Liquidation laws in Botswana deliberately weigh in favour of investors and creditors, with workers hardly mentioned.

“We don’t have any options, especially once the matter has gone to court,” says the ex-mineworker.

“The court is supreme and if there’s a court order, it has to be respected. The union is also subject to that law.

“Parliament has to look at the whole liquidation process because the way it is, once the company goes under liquidation, then workers are forgotten. Their benefits, what’s due to them, the law does not really look into that area.”

African Copper’s former workers, meanwhile, continue to mill around Francistown, seized with the irony that what is meant to be the festive season, for them, most certainly is not.

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