- Union says company should have informed the minister a year before intended shutdown
- Minergy blames drop in international coal prices for proposed shutdown
- Union calls for immediate payment of Jarcon by Minergy
The imminent cessation of operations at Masama Coal Mine is unlawful because it is inconsistent with mining regulations, the Botswana Mine Workers Union (BMWU) has said.
On Tuesday last week, Minergy – which owns Masama Coal Mine – announced stoppage of mining activities at the coal mine located at Medie settlement in the Kweneng District.
It cited a significant drop in coal prices from mid-December 2022 by more than 33 percent for stoppage. In a statement before Minergy announcement, BMWU said the procedure is that the Minister ought to have been notified of the intended shutdown one year before it was due to be effected. The union’s statement was released on Monday prior to Minergy’s Tuesday announcement of its decision to halt mining activities.
This is because the contractor at the mine, Jarcon Opencast Mining Botswana, had written to its employees notifying them of possible retrenchments by the end of March. The union statement – which was signed by both the BMWU president Joseph Tsimako and Secretary General Maenge Maenge – said the conduct of both Jarcon and especially Minergy derogates from good mining and business practice and warranted the relevant minister to interdict the planned shutdown and cause an investigation into the matter.
BMWU cited Regulation 4 of the Mines Quarries Works and Machinery Act in terms of which that a holder must give written notice to the Chief Government Mining Engineer within seven days should they wish to abandon their work. “Regulation 6(1) & (2) respectively gives the responsibility for running the mine to the licence holder who, after seeking permission from the Chief Government Engineer, appoints a manager to run mining operations as is the case between Jarcon and Minergy,” the union said.
It added that all responsibilities, duties and liabilities prescribed and/or imposed by mining regulations are attributable to the mining licence holder, in this instance Minergy Limited. According to Tsimako, on the 27th February 2023, Jarcon served the union and the Commissioner of Labour with a notice of shutdown in terms of Section 9(3) of the Employment Act on 27 February, giving the parties 30 days before shutting down operations would be done.
Jarcon’s impetus for the shutdown is said to have been triggered by the non-payment by Minergy Limited (client) of services it rendered at the coal operations under its mining agreement. “Given that core mining human resources are employed by Jarcon, non-fulfillment of the payment obligations owed to it directly impacted employees,” Tsimako said. “As a result, Jarcon had no choice but to retrench its employees.”
The union has therefore made a series of demands, including the immediate payment of Jarcon invoices by Minergy Limited. BMWU has also called for the immediate interdicting of Masama Coal Mine’s planned shutdown by the Minister of Minerals and Energy. It also wants ascertainment by the minister regarding whether Minergy has complied with provisions of mining regulations to make its shutdown lawful.
In explaining the decision to temporarily halt operations, Minergy CEO, Morné du Plessis, said a large proportion of Minergy sales for the last six months were generated by coal exports through Walvis Bay in Namibia buoyed by high coal prices originating from the Russia-Ukraine war because gas and coal from Russia were banned, resulting in a global energy crisis. “This afforded Minergy the opportunity to run mining and plant operations at full capacity and the company ramped up operations accordingly,” he said in a statement published on Botswana Stock Exchange (BSE) website.
“The significant drop in coal prices from mid-December 2022 (33 percent) has resulted in the need to curtail operations at Masama in order to optimise operational cost.” Du Plessis said while operations such as sales of stockpiles will continue with Jarcon’s assistance, mining, and indirectly beneficiation, have currently stopped and will be resumed in line with demand and price. “There is no truth to the rumour that Minergy is closing the Masama mine,” he said.