Mokaila’s options on BCL management

SHARE   |   Monday, 08 February 2016   |   By Phillimon Mmeso
Minister Mokaila Minister Mokaila

The Minister of Minerals, Energy and Water Resources Kitso Mokaila has come out openly on the financial crisis facing BCL Mine, admitting that some of them are self-inflicted. Answering a question in Parliament on Friday, Mokaila said that the BCL management is not doing enough to address the financial mess that the mine is finding itself in. “They are not serious about cut costing measures and still own a private jet when they don’t have money which I told them to dispose of,” said Mokaila, adding that he has even discussed the issue with the Board of Directors. Mokaila said that he is concerned that BCL management and Board of Directors seem not to be aware of the reality they are facing. “I told them my concern about some of the people within the management whether they are the right people to hold such positions,” said the concerned Mokaila.


When BCL, which also owns Tati Nickel Mining company, started to experiencing financial constraints it was discovered that the financial department which is led by Jonathan Vergeer, a former commercial manager at Morupule colliery, had not sourced the much needed P300 million for the refurbishment of the smelter. The management was forced to use operational budget to fund the refurbishment, leading to the copper mining company failing to pay its employees on time. The other institutions that suffered due to the poor financial planning by BCL were the struggling Water Utilities Corporation (WUC) and Botswana Power Corporation (BPC). He said that he has three options one which is to turnaround the performance of the management but said he is doubtful it will work. The second option is to fire the entire team and bring in a new management team.

The last solution, according to Mokaila, is to institute an investigation on how the management can be helped to steer the ship in a right course. The MP for Selibe Phikwe West Dithapelo Keorapetse asked him if he will consider a forensic audit, Mokaila became evasive and said that they are doing something to rectify the situation. Mokaila said that BCL management is slow in doing things right, giving example of failure to secure a loan to fund the refurbishment of the smelter. Government has offered to guarantee any loans that BCL seeks from commercial banks. “We have told them to find a liquidity partner and raise another funds on their own,” he told Parliament. One of the challenges that are exacerbating the financial situation at the copper mining company is the unfavourable commodity prices with copper and nickel trading below three (3) pounds an ounce.

On the refurbishment of the smelter, Mokaila said that the project was delayed by seven weeks due to delayed payments to the contractor due to cash flow problems constraints and the unanticipated extra works associated with small bore piping assembly for flash smelting furnace cooling system. Another cause for the delay, according the Minister, was due to the late obtaining and/or denial of contractor work permits which affected work pace. “Delays with lifting and installation of the mantel sections of the uptake shaft due to inclement weather conditions and attendant lifting restrictions,” he said. The overall costs of the refurbishment of the smelter has cost the copper mining company at P749 million which was beyond the initial cost by P49 million.

Sources within the Cabinet have revealed that government has taken decision to fire the whole management and the board. One of the reasons that have irked cabinet is that the BCL board led by Botswana Meat Commission (BMC) Chief Executive Officer, Dr Akolang Tombale and the management team by Dan Mahupela has been giving cabinet wrong information on the financial situation at the mine. One of the issues was the failure to source external funding for the refurbishment of the smelter leading to the company galloping its operational budget. The board agreed to fund the refurbishmentby P400 million with the management sourcing P300 million but the financial team slept on the job leading to the financial mess.