BCL Managing Director Dan Mahupela is optimistic that the copper and nickel mining company is on the right track in ensuring that it turns around its fortunes.
Addressing members of the press during in Selibe Phikwe on Thursday, Mahupela said that the financial performance has shown that they have achieved a 4% growth in turnover in 2014 compared to 2013 as a result of firmer pricing, weaker Pula (to US$) exchange rates and strong cost containment measures executed. Mahupela who has been elevated from being a General Manager to Managing Director said that the 4% growth in turnover was due to the various cost containment, productivity and efficiency projects under execution. “BCL’s balance sheet is showing a sound financial position with the company now debt free following the successful conclusion of the restructuring exercise embarked on with the Botswana Government,” said Mahupela.
In the past BCL Mine used to be financially dependent on government as the mine was not performing well and Mahupela revealed that government debt of P3.67 billion which had previously overshadowed BCL’s operation was cleared with P1 billion paid out in cash while the remaining balance converted into equity.
In ensuring that BCL keeps a healthy financial balance, the BCL MD said that they are now diversifying their businesses with majority of the expenditure related to mining capital development. BCL smelter is one of the biggest within the African region and has been under-utilized due to low supply of nickel concentrates. To ensure that they expand and sustain the nickel circuit, Mahupela said that they are now redesigning and refurbishing the smelter to make it a strategic asset around which the nickel business is anchored. “The acquisition of the Nkomati nickel mine and negotiations for long term off take for Nkomati concentrates is aimed at achieving the goal of full smelter capacity utilization going forward,” said Mahupela.
He revealed that BCL has completed the acquisition of the Tati Nickel Mine and they are in the final stages of completing the 50% acquisition on Nkomati mine. Nkomati is a nickel mine in South African and is the only primary nickel producer in South Africa. The acquisition of the two mines came after BCL through their POLARIS II strategy bought the shares of Norilsk Nickel’s at both mines. This was after the Russian mining company decided to shed off their African mining assets.
The life span of both the BCL and Tati Nickel mine were said to be near due to the depleting ore and Mahupela said that a mine optimization is being carried out to extend the life of the two mines. “At Tati the study aims to review resources at Phoenix and Selkirk with a view to extend mining to match the other nickel sources namely BCL underground and Nkomati,” he said.
As a way of ensuring that BCL continues to be in the mining industry, Mahupela mentioned that exploration for nickel resources continues to show satisfactory progress with the Maibele exploration project near Tshokwe village moving towards a successful bankable feasibility study before the end of 2015. “Further exploration work continues at Dikoloti, 5 km west of Selibe Mine, with metallurgical test work being the focus,” said the optimistic BCL Managing Director.
As part of diversifying their mining investment, BCL during the launch of POLARIS II said that they are going to develop an iron ore circuit. Updating on the development, Mahupela who has previously vowed to turn Selibe Phikwe into a mining city, revealed that they have made significant progress through the establishment of Pula Steel Casting and Manufacturing plant. In 2012 BCL was given exclusive prospecting rights for two prospecting license tenements within the Mahalapye area, PL160/2012 and PL161/2012 respectively, to explore for hematite iron ore and associated manganese. Mahupela said that work is continuing at the two sites to explore for iron ore which he said will in the short to medium term augment feed material for the Pula Steel plant. “In the long term, BCL is still looking at the development of standalone blast furnace to produce billet from the readily available iron, coal and limestone ingredients from Botswana,” said Mahupela.
Regarding Pula Steel, Mahupela said that the plant will be commissioned in August this year and added that the board of directors of BCL has approved an investment of up to P53 million to support construction of the plant. The additional funding of Pula Steel plant according to Mahupela, was to fast track and bring forward some of the key processes of the project to ensure that it is delivered. He said that they have decided to combine the construction of phases one and two which will result in the increased employment opportunities which will double. This also means that, such production levels, upon commissioning of the plant, will ensure greater shareholder value in terms of projected returns on investment, said Mahupela.
Selibe Phikwe town has been regarded as a health hazard town due to the Sulphur dioxide produced by the BCL smelter but this is going to change according to Mahupela. He revealed that they are going to convert it to valuable products. He said that they have completed a feasibility study which has proved the viability of a range of chemical products which include fertilizer, stock feed and detergent soap. He added that the feasibility study is now advanced to bankable stage with sourcing of raw materials being a key priority noting that the study will be completed by December 2015.
As part of their diversification strategy, BCL has acquired a coal exploration license and will commence work in the second half of 2015, revealed Mahupela. He said the study for a Coal/Waste to Liquid (CTL) prototype plant is ongoing with a Canadian company, Converde and that the study for a captive coal fired power station has been completed. “This will inform BCL on options regarding energy going forward,” he said.
He announced that BCL in discussion with various international financial institutions to explore options for funding for POLARIS II projects. Mahupela, who is a graduate of Queens University in Kingston, Ontario, Canada said that they are in the middle of discussion with the African Development Bank with a view to assist BCL to build a metallurgical and chemicals hub in Southern Africa by funding some of their projects. As a parting shot, the optimistic BCL MD said that people should start taking advantage of available opportunities within the BCL projects, “Batswana must stop viewing themselves as the working class but rather part of the industrialization," he said.