BCL can get a buyer

SHARE   |   Monday, 17 October 2016   |   By Charles Siwawa
Charles Siwawa Charles Siwawa

The decision to place the BCL Group of mines under temporary liquidation is quite sad against the backdrop of efforts by the government on employment creation. However, it must be said that this company is wholly owned by the Government of Botswana and as such is subject to competition for financial resources with other institutions that fall under the government. The factor that contributed to the demise of the BCL Group can be traced back to a large degree on commodity prices where the mining industry across the globe has experienced prices that are below operational breakeven levels in recent history. The issue of income being subservient to costs cannot be sustained for a long period without affecting the viability of any business entity irrespective of the type of business.

The BCL Group of mines is a viable and profitable entity, but has suffered the effects of insufficient cash injection (recapitalisation) to keep the operations going without the guarantee of a marked improvement in commodity prices (income generation) in the short term. The hope within the mining fraternity is that whilst the operations are temporarily closed, there will be entrepreneurs out there who could find this business entity appetising enough for them to inject the required capital and get the mines operational once more. The country has experienced closure of base metal mines in the recent past and it is important to note that they have exchanged ownership after going through a similar process. There is reason to believe that with such infrastructure at BCL Group of mines that has been in existence for decades and fully serving the community around the operations, together with the available mineral deposits these mines should be attractive enough to any investor in the open market.

Charles Siwawa, CEO of Botswana Chamber of Mines, offers his personal views on the BCL crisis.