The BCL board is said to be unhappy with how the management handled their financial situation, especially the diversion of operational budget to fund the refurbishment of the Smelter. Information gathered by this publication is that the Board has instructed Managing Director Dan Mahupela to clean up the finance and administration department which has put the copper mining company in financial crisis. A source within the management has revealed that all is not well within the department, with most blame placed on department head Jonathan Vergeer. Some in the department have even questioned his experience.
Vergeer joined BCL in May 2014 as Head of Finance and Administration responsible for all support services except organisational capacity. He was previously employed at Morupule Colliery where he was the Commercial Manager responsible for Sales and business growth from September 2013 to February 2014. Vergeer previously held the position of Acting Marketing Manager at Morupule from June 2009 to August 2013. The board, which is chaired by BMC Chief Executive Officer Dr Akolang Tombale, feels the financial difficulties that the copper mining company is finding itself in are self-inflicted.
Early last year BCL executive management met with the board of directors where they made a proposal to have the smelter refurbished in anticipation of more ore that they expected to process especially from Nkomati Mine in South Africa. According to inside source, the refurbishment budget was P700 million and the board agreed to fund the project with P400 million, with management tasked with identifying external sources to raise P300 million. “At the time copper prices were doing well and BCL’s purse was in a stable position but the finance department sat on the advice from the board to approach financial institutions for funding,” said the source, adding that it was only after the awarding of the tender to Kentz Electrical of South Africa that an attempt was made to raise the P300 million.
When they approached the banks, it was too late since copper prices had collapsed to as low as $5 an ounce and hence BCL was no longer attractive to do business with. The panicking BCL management was forced to use operational budget of P300 million to cover the remaining balance, which landed the company in its current financial crisis, revealed the source. The Board has since instructed Mahupela to take action against all that are to blame for the current developments. Contacted for comment Vergeer declined to comment, referring this publication to BCL communications Manager James Molosankwe, who also refused to comment.
Other BCL Exco facing possible axe
When he was appointed the BCL General Manager Mahupela promised to turn Selebi-Phikwe into a mining city by diversifying resources and operations of the mine from being a single commodity to a diversified business enterprise through POLARIS II. During the launch of POLARIS II and the acquisition of Norilsk Nickel Company assets being Tati Nickel Mine and Nkomati Mine, the upbeat Mahupela said that they want to make BCL one of the biggest mining companies in Africa. “We have a reputation on the basis that we are a Botswana company and would be easy to approach capital investors to fund our strategy. We want to transform BCL as the largest company in Botswana and create Selebi-Phikwe as the third largest city in the country through this Polaris II strategy,” he said amid the clink of champagne glasses as he toasted with his top managers during a media tour last year.
Three years down the line his face shows fatigue and stress as the board is breathing down on his neck as the copper mining company is crumbling under his feet. The collapse of copper and nickel prices, which are now below $5 an ounce, are not making the situation any easy for Mahupela. His job at the copper nickel mining company is no longer guaranteed. Another project that might cost him his job is Pula Steel Manufacturers which was expected to diversify the economy of Phikwe and create more employment. The project, which had a rough start, is continuing to milk millions of money from BCL as recently they requested P11 million in loan from BCL on top of the P2.5 million facility recently given by BCL, which the steel company has not been able to pay back.
Mark William - Divisional Manager - Corporate Strategy
To most of BCL employees POLARIS II is Mark Williams’ creation, as he spearheaded the project from the start. Some board members have long expressed their reservations on some of the ambitious projects that BCL Management wanted to engage on. Inside sources have revealed that Williams is also sitting on a hot seat as some board members put the blame on him for failing to ensure that POLARIS II strategy becomes a success. His job is also said to be not guaranteed as government refuses to give the mine a P1.5 billion equity injection, advising rather BCL to go to the market to float a bond. Efforts to get a comment from BCL management hit a snag as they did not respond to a questionnaire though they promised to do so.