African Copper yesterday suspended operations at its Mowana Mine outside Francistown, putting close to 400 workers on paid leave until November 19, when the High Court is due to hear a liquidation plea brought by one creditor.
The troubled mine has been battling declining copper prices since 2008 and African Copper’s latest financial results show that the company recorded a loss of $8.8 million (P89 million) for the six-month period ended September 30, 2014, compared with a loss of $29.1 million for the corresponding period in 2013.
African Copper shut down its adjacent mine, Thakadu, earlier this year while warning that continued operations were dependent on an improvement in copper prices and additional funding.
Yesterday, a team of senior Botswana Mine Workers Union (BMWU) officials who descended on Mowana in the morning, meeting with management and workers, told Mmegi that an unpaid contractor was seeking the mine’s liquidation.
“The contractor, Diesel Power, is demanding payment for services and has now gone to court to say African Copper must either pay or liquidate Mowana and pay the proceeds,” BMWU president, Jack Tlhagale said.
“The Mine has suspended operations and sent workers home with effect from today (Wednesday). We met with management and they have given workers some sort of break until November 20, because the case is due in court on November 19.”
Recently, Diesel Power suspended all works at Mowana mine, citing non-payment of financial dues.
African Copper engaged Diesel last year in a $113 million (P1.2 billion) hard-rock opencast mining contract spanning over 52 months.
“We have suspended operations due to non-payment but we are in discussions and taking legal advice for the appropriate action to mitigate losses.
“It would be difficult to give any more details at this point but we will respond in more detail as soon as we are able to,” Diesel‘s general manager of African Operations, Jacques Viljoen, told Mmegi.
The contractor has retrenched its workers at Mowana and Thakadu at least twice in response to tightening operational conditions.
Tlhagale said the latest development was indicative of the battles the Union has been fighting against contract mining, which it says represents the “fragmentation and casualisation” of labour.
“There’s no job security and these are the issues that arise from this. In addition, companies are not transparent. You cannot inform workers when the company is already in court.
“You knew a month ago that you had problems with Diesel Power, then you only tell workers now.
“All the time, workers are put on the receiving end of hardships that come with the cost of production.”
Tlhagale said the Union was also unhappy that the break Mowana Mine workers have been placed on would be taken from their personal leave.
Workers at the Mine, speaking on condition of anonymity, told Mmegi that they had received a brief indicating that the Mine would be suspending all operations, pending a liquidation hearing.
“This was after receiving our salaries very late,” one worker said.
In October, Mowana Mine general manager, Kenneth Masogo told Mmegi that the operation was battling with low copper prices.
“Management salaries were delayed, for the month of September, because copper production (source of revenue) was behind,” he said.
“Like all challenges, we do overcome these through the continued support from our shareholders. Paying creditors and/or salaries late could be due to a combination of factors such as low copper production, low copper price and difficult trading terms caused by reduction in risk appetite, especially from our trading partners.”
Mowana Mine’s closure comes after a similar development at Boseto Mine, which ended operations in February, costing about 800 jobs.