The Minister of Minerals, Energy and Water Resources, Kitso Mokaila has confirmed that the government owned copper-nickel mine BCL is drowning in cash flow problems following a prolonged smelter shutdown. Responding to Selebi-Phikwe West MP, Dithapelo Keorapetse’ questions on the mine’s cash flow situation during Minister’s question time on Friday Mokaila explained that with the smelter still down and the commodity price still not good it was hard for BCL to keep afloat. The shutdown ran from July and was estimated to cost P700 million. During the shutdown the plant was supposed to undergo refurbishment in its flash smelting furnace, waste heat boiler, drying plants, electric furnaces and converters.
Mokaila told parliament that the 62 days that BCL had allocated for the smelter shutdown was perhaps too ambitious. So bad was the situation that, he says, even the stockpile that one would expect the mine to survive on while the smelter is still down has been wiped out. As it is the mine is now eating into its reserves and with the commodity price so low, the mine cannot sell at the right price hence will never reach its intended price of returns. According to the Minister, he has since instructed the BCL board to do all it can to get the company out of the deep by cutting down on non-essential spending and by reducing overheads as much as they can. Because Keorapetse had wanted to know how workers conditions of service are likely to be affected including salaries and allowances increment, Mokaila stated that ideally government will do its all to make sure that workers are the last to be affected by these changes.
Though he did not entirely rule out possibilities of retrenchment, he noted that they will be eventually affected one way or the other. He, however, noted that workers would be the company’s last resort as far as cutting costs is concerned. “Of course if the company is not doing good, then certain benefits such as the 13th cheque falls off,” he said, answering Keorapetse’s question on whether BCL workers will be afforded the 13th cheque this year. According to Mokaila, experts opinion suggest that it will take two years before prices get better but nonetheless said he was optimistic that BCL’s investments into Komati will beef up its operations so long. When asked by Gaborone Bonnington South MP Ndaba Gaolatlhe on whether BCL was facing cash flow or profitability problems, the minister boldly stated that the company was unfortunately currently facing both.
He said by injecting funds into BCL early this year, government was hoping the company will get out of the deep and be profitable again but said the move was however countered by the fall in commodity prices. “There is a lot that is happening around BCL in trying to keep it more viable,” said Mokaila. He told Parliament that there is a possibility of BCL listing in the stock exchange as soon as it gets out of the deep but as for now focus is on saving it.