- Former board chair says mine is not viable
- “Nobody can control the price of nickel”
VINCENT MATUMO
Dr Akolang Tombale, who recently resigned as the board chair of BCL says it would be a good decision if government shuts down the mines. Tombale says that the mine not only has low grade ore, but the viability of its operations wholly depends on ore prices recovering to profitable levels, an uncertainty he says cannot be pre empted.
“We were depending on China but it is common knowledge that their economy has its own challenges,” he said. On whether or not he failed as board chair, Tombale said that he is proud to have been called to step in and help steer the mine during troubled times.“It is the people who judge you, you don’t pass judgement on yourself; I accept criticism but it should be based on facts,” he said.
On whether he has any regrets, he does not beat about the bush: “I should have closed the mine.”
“The mines really have to close because they are not viable,” Tombale stated, adding that “there is nobody in the world who can manage the price collapses.” “My role was to come up with a strategy and we did that with Polaris 11 which recognised that the current mines are not viable,” he said.
“Currently the nickel price is lower than $3 but break even is $5 and so it should be around $7 for the mine to be profitable, and again it is low grade ore,” said Tombale.“Technically speaking, we wait for the prices to recover but the longer the recovery takes the more painful, it is up to the shareholder,” he said.
“If you think it will recover, you put in money and re-finance the operation, even De Beers was refinanced,” he explained,“But you must ask yourself if it will recover.” “Nobody runs such a low grade ore mine anywhere in the world and BCL has actually done well thus far but is very marginal,” he said.
BCL Mine Limited on Monday however said it plans to raise $250 million through a bond open to both local and foreign players to finance acquisitions.
Acting divisional manager Tobokani Mosetlha told a media briefing recently that the firm has engaged Barclays Africa Group to facilitate the bond issuance planned for later this year.
“The funds would be used to settle a $100 million facility we recently acquired from Barclays as well as finalise the acquisition of a 50 percent stake in Nkomati Mine in South Africa,” Mosetlha is quoted as saying.“Due to the size of the bond, the plan is to open it to both foreign and local investors,” he said.
Though Minerals Minister Kitso Mokaila could not be reached by the time of going to press, media reports have since revealed that Government has declined BCL’s request for another P1 billion as the loan facility it had sourced from financiers with Government’s backing, had been exhausted.
Meanwhile, the Botswana Mine Workers Union has approached the Labour Department in an effort to get the mine to release audited financial statements for the year 2014/2015, saying they are in the dark about the mine’s finances. BCL mine however said it incurred a P1.2 billion ($116 million) loss in operating costs in 2015 due to a slump in world commodity prices.
On the issue of why there are so many deaths at BCL, Tombale said the accidents at the mine are few compared to other operations around the world.“I wish there were no deaths at BCL but the reality is that we have very few incidents when you compare with other mines of this size in the world,” he said.
The mine is yet to release a report of an investigation into the cause of a mine accident that occured in May this year, which saw four miners killed and four others injured when underground personnel transport crashed.