- PNRB buys BCL shafts for P770 million; Selkirk Mine for P66.97 million
- Govt clueless about value of BCL asset before PNRB sale
- Next stage of disposal process starts in March 2022
The new owners of BCL assets at Selebi South and Selebi North shafts, Premium Nickel Resources Botswana (PNRB) have paid P770.21 million for the acquisition, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Maxwell Moagi told Parliament on Friday.
On the other hand Selkirk Mine was sold for P66.97 million. Responding to an inquiry from Dithapelo Keorapetse, MP – Selibe-Phikwe West, during a ministers question time on Friday morning, Moagi said PNRB has committed to pay P337.87 million now and the balance of P337.87 million when they start production. Full production will only start when further exploration, scheduled to take three years, is completed. He, however, could not disclose the value of the BCL Limited assets prior to the transaction.
“The Liquidator has entered into an agreement with a buyer to sell the Copper-Nickel matte to the Company, after competitive bidding, for P100 million. This matte remained as part of production at the time of BCL was placed under liquidation. The sale of scrap and non-core assets raised P6 million, and this comprised movable assets such as vehicles,” Moagi explained.
Moagi revealed that the extent of the value of the mineral resource is not known and it is an integral component of the transaction that PNRB is obligated to fund a significant prospecting and drilling programme as an initial step towards opening the mine, which is expected to cost approximately P300 million.
Pressed for more answers by Keorapetse, the minister could not convincingly explain why Botswana government overlooked locals and instead appointed a Cape Town based lawyer, Trevor Philip Glaum as the BCL Limited liquidator. He would not say how much was paid to the former and current liquidator, notwithstanding that public funds were used. Instead, Moagi said a number of local professionals were approached but declined the offer, but failed to disclose names.
Probing, Keorapetse had asked the minister to state if Botswana does not have natives who can be appointed liquidators to manage the remaining assets at a marginal cost than the current and previous one. “What qualifications and experience are required that native Batswana don’t have? The said PNR deal is possibly the major one on BCL Liquidation, so what is the closure or exit plan on liquidation, surely this process has to end sooner rather than later,” he asked.
On why the Liquidator opted for PNRB, when there were other bidders interested in buying all the assets owned by BCL Limited, Moagi said the most competitive bid was chosen. He said as much as some bidders may have expressed interest to take over all BCL Limited assets, their offers were not good enough.
Moagi explained that the agreed exploration period is for three years with the right to extend for an additional 1 year. This time is required given that the management of BCL prior to liquidation chose not to ascertain the extent of the mineral resource, and PNRB as an initial step must do so. He said close to 100 jobs will be created immediately by PNRB in terms of their prospecting and drilling programme and P300 million will be injected into the local economy.
“Upon completion of the exploration period, and it being successful, PNRB has undertaken to expend approximately P5 billion to construct new mining infrastructure at Selebi. It is envisaged that further hundreds of jobs will be created. Upon completion of the construction and opening of the new mine for production, hundreds of additional mining jobs will be created. In respect of skills, all forms of mining, engineering, construction and soft skills expertise will be required. Opportunities will be both direct and in the support services. We are convinced this will lead to the renaissance of the Selebi Phikwe economy and by extension, neighbouring villages,” said Moagi.
Currently, out of a work force of approximately 481 people, only five (5) expatriates are employed representing only 1.04 percent of the work force.
The Liquidator is currently engaged in the next round of disposals of BCL and Tati assets, which will have the effect of recovering significant funds for the estate and the rejuvenation of other economic activities, he said.
Going forward, Moagi told Parliament that the Liquidator aims to sell the remaining assets of BCL Limited over the next 6 to 7 months. The next stage of the disposal process will be started in March 2022 when all persons will be invited to participate in the right to bid to acquire assets on offer.
Such assets include the remaining Phikwe Mines comprising two shafts, smelter, concentrator, tailings dam, slag dumps, open pit, workshops, training centres and labs. Non-mining assets to be disposed of include the hospital, office block, housing units and a farm. The remaining Tati assets associated with Phoenix Mine will also form part to the disposal process now being embarked upon.
BCL Group of Companies has been put under liquidation since October 2016. Providing an update on the BCL Group of Companies -In Liquidation on February 09, 2022, Juliana Dube-Gobotswang -the Chief Registrar of the High Court said following the conclusion of the exclusivity period and the resultant signing of the Asset Purchase Agreement on 28th September 2021 between PNRB and the Liquidator of BCL Limited, in respect of the disposal of certain assets of BCL situate at Selebi North and Selebi South, the conditions precedent to the Selebi Transaction recorded in the Selebi APA have been fulfilled by the parties, including the receipt of all necessary regulatory approvals.
“In the premises, the transaction recorded in the Selebi APA has reached financial close and with effect from the 31st January 2022 the assets and undertaking formerly held by BCL at Selebi North and Selebi South are now owned by PNRB. The conclusion of the Selebi Transaction by the Liquidator of BCL has been expressly approved in terms of an order of the High Court, the Chief Registrar of the High Court and by the Botswana Government as the main Creditor in the liquidation,” wrote Dube-Gobotswang, adding that subsequent to the Selebi Transaction, the Liquidators of the BCL Group of Companies remain in possession of certain assets held by each of BCL and Tati Nickel Mining Company (Pty) Limited, of which assets shall be subject to a further disposal process commencing in quarter one of 2022.
On September 28, 2021, when PNRB and the Liquidator jointly announced that they had executed a definitive asset purchase agreement through which PNRB would acquire Selebi, and Selebi North nickel-copper-cobalt assets and related infrastructure. This agreement set the terms & conditions for a 120-day period to complete all conditions precedent for the final transfer of the Selebi Mines from the Liquidator to PNRB.
Earlier, on March 24, 2021 PNRB had completed a Memorandum of Understanding with the Liquidator for a six-month exclusivity period to conduct a due diligence exercise and afford the Parties time to complete the formalities and agreements required for the sale of the assets.