The Umbrella for Democratic Change (UDC) Secretary General, Ndaba Gaolathe, has warned that the looming BCL collapse could pose serious problems for the country, at worst precipitating a recession of entire the economy. Gaolathe, who is an economist by profession, urged government to appoint high impact, experienced and knowledgeable leaders that have strong strategic and execution outlook to the boards. He said the current board has failed BCL, saying that the just resigned board chairperson Dr Akolang Ntombale was the wrong person for the job as he has failed to turn around Botswana Meat Commission (BMC) where he is the Chief Executive Officer (CEO).
Gaolathe said that their findings show that there are management lapses at the copper mining company coupled with alleged corruption. The UDC leader said there is an urgent need to replace the current Managing Director of BCL Dan Mahupela – whose contract expires in August this year – with a competent person. Government as the shareholder at BCL, according to Gaolathe, has failed to appoint high impact CEO/top management. He said having a high impact, experienced and knowledgeable Board will lead to the appointment of a capable CEO. The cash strapped BCL under estimated their required rescue package when they asked Government to guarantee a P1 billion debt with ABSA/Barclays when they needed more. Gaolathe said that the mine needs capital injection, mainly equity with long term view.
“BCL needs major capitalisation, probably more than P6 billion and can make decent returns from this... Strict finance timing and structuring of terms, not knee-jack reactions,” said Gaolathe. One of the issues that worry Gaolathe is the secrecy behind BCL financials and their POLARIS II strategy. He said they have tried to get the strategy document and financials to no avail. Gaolathe said the mine should limit the diversification by prioritising projects to get involved in. He advised BCL to change their operational model towards own mining. Last year the copper mining company spent more than P700 million to refurbish their smelter and to that Gaolathe said they should conceive and execute bold plan to run high quality smelter, with much higher levels of up-time.
Since its commissioning early this year, the refurbish smelter has been underutilised; operational for less than 30%. About the looming retrenchment at the mine, Gaolathe said their preliminary investigations have shown that there is no need for the copper mining company to retrench. “There is no need for lay-offs. If need be, monetary ceasing or lowering of selected activity to preserve cash until recovery of commodity and special programme to boost labour factor productivity is necessary,” advised the UDC Secretary General, adding that there is an opportunity to improve morale and labour relations. He said BCL is currently facing a rapid loss of skilled and experienced manpower with productivity levels being very low.
“There is neglect of labour welfare (housing, low safety standards, low risk allowance) and deteriorating labour relations between the mine management and Mine Workers Union,” he said, noting with shock that the risk allowance at the mine is P99 per month. He called on government to revise workman’s compensation standards for workers facing such high risk. The BCL has experienced lot of accidents in the mine with high fatalities and Gaolathe blames government as a regulator for having failed to take action. “Investigations are done, but there are no consequences for breach of standards and neglect of safety standards,” he hit out at government.
Government should ensure punitive action is taken against the companies that flout standards, said Gaolathe, adding that strict restrictions should be slapped on stakeholders until certain corrective measures are made. As part of their cost recovery measures BCL management announced early this year that they will dispose some asserts including the private jet and houses.
Though Gaolathe agreed that disposal of assets can be used as part of cost recovery, he regretted that those done by BCL are just peripheral and won’t bring any changes to the current financial situation the mine is facing.