The High Court has issued a final liquidation order for Mowana Mine, leaving the suspended operation facing a possible auction of its assets early next year.
Owned by African Copper, Mowana and its sister operation, Thakadu, both succumbed to the lowest copper prices in six years, which earlier this year forced the closure of Discovery Metals’ Boseto Mine.
African Copper axed 350 workers at the mines last month, whose termination dues will only be paid after other creditors, who include the majority shareholder, government, banks, contractors and suppliers.
Yesterday, provisional liquidator, Max Marinelli told Mmegi that there had been some enquiries from interested investors, although nothing amounting to an offer for the mines.
“We have a few enquiries and we will pursue these early next year, when everyone gets back to work,” he said.
“What we have received are not offers, however. They are informal enquiries to say ‘we are interested in buying everything’.”
Creditors and workers at the mines go into the festive season hoping for a firm buyout offer, some rescue package from the majority shareholder, ZCI International, or a bailout from government. However, the last two options are highly unlikely as ZCI Limited is yet to make any indication of further support, while government is battling losses at its own copper operation, BCL Mine.
Parties involved in the latest developments will be hoping to avoid an auction of assets, as these usually attract bargain hunters with little interest in the potential of the whole project.
At the front of the queue after auction or buyout will be ZCI Limited, which is reportedly owed more than P1.2 billion in debt pumped in previously to keep the mines operational. Government will also be demanding its dues, which include deferred royalties and possibly training levies.
Diesel Power Mining Services, the mining contractor and lead petitioner for liquidation, is owed P47 million.
“The second creditors meeting will discuss any tabled offers and if there are none, we will have to ask for approval to call the auctioneers to sell off the assets for the best price,” Marinelli said. “For now, we continue to secure the assets and make sure things are in order, while waiting for potential investors or buyers so that we table these proposals at the second creditors meeting.” The first creditors meeting, due to be held towards the end of February or early March, will focus on tabling and proving creditors’ claims and also producing a record of assets and liabilities.