The government has turned down a P75 million budget request for BCL Mine’s care and maintenance costs in the upcoming financial year.
Minerals and Energy Minister Bogolo Kenewendo revealed the decision while presenting her ministry’s budget proposals in Parliament this week. She explained that the mine’s operational costs average P8 million monthly, totaling approximately P96 million annually in direct and support expenses.
The rejection comes as the government tries to cut down on spending amid low revenue from diamonds, the mainstay of the economy.
With only P30.5 million remaining in liquidation funds, BCL Mine’s operations will be forced to cease by end of March after the government rejected its budget request for the next financial year.
The BCL Mine liquidation process, ongoing since October 2016, has entered its final phases with significant asset disposals completed, including the government’s purchase of more than 1,000 residential units valued at P451.5 million.
According to the minister, the liquidator may end up selling 127 houses through auction which will be limited to vacant houses.
“Government will have first right of refusal to purchase what is not sold through auction,” Kenewendo.
BCL facilities such as offices, laboratories, workshops, smelter, and concentrator have also been sold through auctions.
Kenewendo told Parliament that facilities such as shafts and tailings dams remain with the liquidator as they have not attracted any buyers.
PNR Botswana has acquired two shafts at BCL, Selibe and Selibe North, and embarked on an exploration programme at them.
Nonetheless, Kenewendo told parliament that the mine would not come back as previously known.
“Phikwe as we know it will not happen,” she said.
“Some shafts have been closed and we have to come to terms with that. The future of Selebi Phikwe is mainly based on the assets bought by PNRB.”
The minister said the majority of the assets have been stripped and sold for scrap.
“So, even PNRB which we sold two shafts to, will be responsible for bringing Phikwe back to life, not the Selebi Phikwe BCL Mine as we knew it,” she said.
“These are the sad news that we have to deliver and confront and start to look forward to the future of Phikwe and surrounding areas.”
The government has recently set up a commission inquiry to establish the circumstances surrounding the closure of BCL, a development which even though Botswana Mine Workers Union (BMWU) welcomes, seeks to be part of it.
“BMWU welcomes the decision by President Duma Boko on the appointment of the judicial commission of inquiry on the BCL mine liquidation, union president, Joseph Tsimako told the media this week.
“BMWU acknowledges the President’s encouragement of BMWU members in supporting the commission through the provision of evidence that could assist it in unraveling the intricate and complex processes surrounding BCL liquidation.”
However, the union believes the Commission of Inquiry could have been made dynamic and robust through the inclusion and appointment of a representative from it.
Tsimako said this would have added a revolutionary and progressive element to how the Commission of Inquiry would execute its mandate.
The union president said the Commission of Inquiry must not be used to delay the payment of outstanding soft-landing packages owed to BCL former employees.
“It is clear that the commission of inquiry seeks to understand the underlying reasons for the government’s decision to close BCL but not necessarily on whether separation packages were paid to employees,” he said.
“However, the inquiry into those decisions by the previous administration can be done simultaneously with the payment of former BCL members’ outstanding soft landing packages.”
The union insists supporting the work of the commission through the provision of evidence is not enough, hence demands inclusion in the commission.
“The union wishes to be part of the process,” Tsimako said.
“The union brings lived experiences of former workers of BCL including operational nuances that no legal expert will understand about the operations of the BCL Mine.”
Minister Kenewendo has set up a Task Force as well for Geohazards Monitoring as well as to carry out other assessments.
She said the medium-term aim is to assess if there is any economic value in the remaining shafts and which value can be salvaged through an asset sale or asset utilisation, and for those that do not have economic value to recommend mine closure.
The union, however, insists there is a need to engage with Minister Kenewendo to appreciate how these entities will work together and whether there will not be overlapping mandates between these two structures.
“It is important to note that the commission of inquiry is established pursuant to Presidential Powers exercised under the Commission of Inquiry Act, whilst the other entity is purely administrative with no legal backing,” Tsimako said.
