Spoof suspected in BCL sale
• Critics question selection of preferred bidder for opacity • They believe more resourced bidders with more specific schedules were sidelined • Want the other bidders specified • Preferred bidder was incorporated in 2018
Hardly a week after liquidator Trevor Glaum announced that he had identified a preferred bidder for BCL, reports have come to the fore suggesting that all that glitters may not be gold because the liquidator’s choice of suitor may be questionable.
Impeccable sources have told The Business Weekly & Review that the company announced as the preferred bidder for BCL, Premium Nickel Resources Corporation (PNR), did not offer the best bid and turnaround times to the liquidator.
On 11 February BCL, Glaum wrote an internal memo to BCL care and maintenance employees informing them that PNR had been selected as the preferred bidder and would be granted exclusive access to the mine to conduct comprehensive due diligence over the next six months. He also announced that he expected an advance team from NPR to arrive in Botswana within the next few weeks and asked BCL staff to give them support.
PNR subsequently made the announcement in international media, thanking the Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi, and undertaking to complete the necessary documentation to govern the six-month exclusivity period that would complete the due diligence process.
However, sources in the mining industry have expressed shock at the announcement, saying there were better international mining houses with better financing and more competitive bids than PNR. Speaking on condition of anonymity, they poked holes in the announcement for its vaguery and lack of transparency and definite timelines.
“President Masisi announced last year that there were three indicative offers for BCL that were under evaluation,” said one source. “At the very least, the liquidator could have released the names of the bidders for purposes of transparency, but we are given only the name of the preferred bidder. No one is telling us who the others were and why they failed. As Batswana, we deserve to know these companies so we can make our own determinations. Why the secrecy?”
According to the sources, such disclosure would likely reveal that other bidders not been considered had made more progress in preparing for opening BCL than PNR. “We know there is a bidder who has completed due diligence, yet the liquidators opted to waste two more years with PNR before starting operations,” said another source.
It has also been reported that the PNR financial bid was not the most competitive as other bidders had readily available cash and offered better financial benefits to government. The sources say PNR is currently soliciting investments of up to US$26.5 million for the BCL project. It appears the money is for be use to finance the due diligence process while the rest will be sourced after purchase of BCL.
The sources have expressed concern that the liquidator has chosen a bidder who may take up to two years or more to bring BCL to operation while others had proposed shorter timeframes and made firmer offers. “The PNR offer is highly conditional,” says yet another. “What if after two years they decide that they don’t want to buy BCL afterall? The liquidator took unnecessary risks and sidelined more competitive bidders.”
BCL, which is the country’s largest copper and nickel producer, was put under provisional liquidation in 2016, rendering over 4 000 miners jobless overnight.
The liquidation process was not without drama and saw former liquidator Nigel Dixon– Warren being fired after a nasty fallout with government. But that was not before he pocketed monthly fees of P2.2 million that eventually totalled over P42.3 million. The liquidation process itself cost government over P2 billion.
PNR was incorporated in Canada in 2018. The company is dedicated to exploration and development of high-quality nickel-copper-cobalt resources.