- BCL owed P320m in Zimbabwe
- Liquidator summons RIOZIM Ltd
- RIOZIM Ltd refuses to pay BCL
Government stands to lose over P320 million worth of BCL Limited ore which was delivered to a Zimbabwean mining company that is now declining to pay the debt pending a protracted court dispute.
Trail of evidence shows that during its operational days, BCL Limited delivered to Zimbabwean based mining company, RioZim Pty Ltd 23 loads of Low Sulphur Matte (LSM) and High Sulphur Matte (HSM), but there is an outstanding payment of more than P320 million, which RioZim refuses to pay, evidence gathered by The Botswana Gazette reveals.
In fact, BCL Liquidator, Nigel Dixon-Warren is in a legal dispute with, RioZim Limited, a company linked to global mining conglomerate Rio Tinto, in which the liquidator is suing for an unpaid debt amounting to USD$30 495 342, approximately P320 million.
On the 5th of December last year, Dixon-Warren, in terms of Section 221 (2) (a) of the Companies Act (Ch24:03), was authorized by the Master of the High Court to institute the legal action. It emerges that in June 2013, BCL, then duly represented by Managing Director Dan Mahupela, with RioZim then represented by one A Ndlovu, entered into a written agreement styled ‘BCL RioZim Matte Purchase Agreement’.
Inside the agreement, RioZim agreed to purchase from BCL a minimum of 1, 033 metric tonnes of BCL Low Sulphur Matte (LSM) per month. The transportation of the material from BCL to RioZim was to be arranged by RioZim, and all associated costs, including insurance.
RioZim is based in Harare. The agreement signed in June 2013 was for a 12 month period. It emerges that the payable metal paid to BCL would be 81.6 percent of each of the contained metals purchased. It was agreed that BCL would charge RioZim USD50 per metric tonne of matte delivered for the cost of producing LSM, recognizing that the production of the LSM at BCL incurred additional charges. Available information shows that the LSM charge would be added to the accountable metal payable to BCL. Further, the agreement was such that the Quotation Period (QP) for copper and nickel would be paid within 60 days after the last day of the month of delivery, with payment within 60 days. Documented evidence seen by The Botswana Gazette reveals that RioZim took delivery of the LSM from BCL premises in Selibe Phikwe Botswana and transported it to Express Nickel Refineries (ENR), a unit of RioZim in Kadona. It emerges the LSM was weighed, sampled and assayed on arrival at the refinery. BCL then issued a provisional invoice based on the results and in accordance with the fixed agreed prices.
Once the LSM was processed, the finished product was again weighed and assayed. BCL then issued a final invoice based on the results and in accordance with agreed fixed prices. Payment was due in 60 days of the date of the finished product being weighed and assayed.
During January 2014, BCL sold and delivered LSM to RioZim and issued a final invoice with the total amount payable in terms of the agreement at USD 5 129 877.14. The invoice was marked ‘BCL6’.
During February 2014, BCL sold and delivered another LSM at the special request of RioZim. In terms of BCL7 invoice, the total payable was USD 859 570.29. During March 2014 also sold and delivered the LSM to RioZim and the total payable was USD 4 462 295.36 as per the BCL8 invoice. In April 2014, BCL sold and delivered LSM worth USD 2 201 152.94 as per the invoice marked BCL9. In May 2014 another delivery was made to RioZim valued at USD 4 601 180.35, the invoice was marked BCL10. Evidence shows that RioZim made payments into BCL’s Barclays Bank Account number 49493222, Selibe Phikwe Branch in respect of the June 2013 agreement. The payments were allocated against the invoices raised during the tenure of the June 2013 agreement. However, evidence shows that a balance of USD 601 857.00 was allocated as part payment of the January 2014 invoice.
Despite the lapse of more than 60 days since the delivery of the final invoices BCL5, BCL6, BCL7, BCL8 and BCL9 and despite demand, RioZim failed to make payment of the amounts due or any portion thereof. The amounts payable in terms of the aforementioned invoices are due, owing and payable by RioZim to BCL. During 2014, and prior to the expiration of the June 2013 agreement, BCL and RioZim negotiated the terms of two agreements for the delivery of matte to RioZim, a High Sulphur Matte (HSM) agreement and a LSM agreement. The two agreements were reduced to only writing but were not signed. The agreements were for an indefinite period. Following the expiration of the June 2013 Agreement, and at the special request of RioZim, evidence shows that BCL delivered both LSM and HSM to RioZim. The deliveries took place between June 2014 and January 2015. The two parties when doing business conducted themselves in accordance with the two unsigned agreements, according to seen evidence.
Inside the two unsigned agreements, the minimum quantities of the matte to be supplied would be 600 Dry Metric Tones (DMT) per month +/- 15 percent at BCL’s option. Further, the unsigned agreements stipulate that RioZim would purchase a maximum of 1450 DMT per month. Further, RioZim as per the unsigned agreements, purchase all the nickel, copper, cobalt, gold silver, platinum, palladium and rhodium contained in the matte. No refining fees were chargeable according to the terms of the unsigned agreements. It was agreed that BCL would charge RioZim USD 95 per DMT delivered. Payments were to be made in 60 days after delivery.
In June 2014, BCL supplied LSM to RioZim, an invoice of USD 1 435 079.80 was issued, marked BCL12. In August 2014, another delivery of LSM was made and BCL invoiced RioZim USD818 284.63 and marked BCL13. A further invoice marked BCL14 of USD 2 184 943, 73 was made to RioZim after the delivery of LSM in September 2014. Also in September 2014, BCL delivered HSM to RioZim and invoiced USD967 637 15. The invoice was marked BCL15.
Further, RioZim in October 2014 made a special request of LSM which BCL delivered. RioZim was given an invoice valued at USD2 503 170 42 marked BCL16. During the same month, BCL supplied RioZim with HSM and an invoice marked BCL17 was made, value at USD 1 160 476 13. Two further deliveries were made in November 2014, valued at USD 1996 002 15 and USD214 767 23 marked BCL18 and BCL19 respectively.
In December 2014 two invoices were made to RioZim marked BCL20 and BCL21 respectively. They were valued at USD721 062 86 and USD 1 141 756 24 respectively. The last two deliveries were made in January 2015. BCL invoiced RioZim USD259 791 25 and USD 470 142 54 labeled BCL22 and BCL23 respectively. It emerges from the paper trail that in respect of the LSF and HSM delivered in December 2014 and January 2015, RioZim failed to process the matte and the final assay was not completed. Instead, BCL sold the unprocessed matte to a third party.
Notwithstanding the elapse of five months since the end of the month in which each delivery was made, RioZim failed to make payment of the final invoices BCL12, BCL13, BCL14, BCL15, BCL16, BCL17, BCL18 and BCL19. Moreover, notwithstanding the elapse of more than 60 days since the end of the month in which each delivery was made, RioZim also failed to make payment of the provisional invoices BCL20, BCL21 and BCL23.
In totality, RioZim is indebted to BCL to the tune of USD30 495 341 83 (approximately P320 million), A trail of evidence shows that on the 28th February 2016, BCL addressed a letter to RioZim requesting to confirm the details of the invoices. On the 23rd of March, RioZim confirmed the amount outstanding to have been the approximate P320 million. However the company is yet to settle the debt.