'Closing BCL a mistake'-Business Botswana

SHARE   |   Tuesday, 14 March 2017   |   By Staff Writer
'Closing BCL a mistake'-Business Botswana

•  85 % of services can’t survive without BCL mine
• Over 50 % (of 39 089) unemployment in the region
• Temporary closure gobbles over P749 million, minus creditors’ debts
• No socio-economic impact study, no environmental impact assessmen

An independent investigation on the impact of the closure of BCL mine conducted by Business Botswana (BB) has concluded that “the town is not yet ready to operate without BCL as the anchor, therefore making the issue of total closure of the mine non-viable. The situation could have been managed better if socio economic and environmental impact studies were done to guide the process.” The report, released on Monday,  criticised government for mishandling the liquidation of the mine which instantly rendered over 6 000 wokers jobless on October 09, 2016.  No consultations, socio-economic or environmental impact assessment was conducted prior to the decision to close the mine, the report found. Although they approved the Polaris II strategy, which has been heavily criticised, BB investigators found it to be medium to long term and narrowly focused on BCL, and therefore recommended development of short term strategies to have an immediate cushioning effect of the Selibe Phikwe economy. "These include relocating some government functions to Selibe Phikwe e.g. agriculture and transport, relocating sections of some tertiary institutions, especially those related to mining, metallurgy and related fields to Selibe Phikwe to boost the economy, and investing  in the production of iron from the existing mine dump to feed directly into Pula Steel,” the report reads. The latest BB investigation has uncovered emerging costs that are quite significant after the temporary closure of BCL mines. “Considering these costs and other unknown expenses, in the medium term, they could turn out to be significant compared to the initial bail out money that was required to keep BCL afloat,” observes BB.
Emerging costs due to BCL closure
           Activity                                                       Costs
i. Terminal benefits of employees                           P700 million 
ii. Running the smelter (later closed)                    P20 million/ month
iii. Operational costs of skeletal staff                    P3 million/ month
iv. School fees for children of ex-employees          P11 million
v. Medical expenses of former employees        P15 million
[Source: Business Botswana Report on BCL]

BB research also shows that as many as over 50 percent of economically active labour force estimated at approximately 39, 086 in the region will join the unemployed ranks because economic and commercial developments and services around Selibe Phikwe are directly affected by the closure of BCL mine. Investigators also concluded that 85 percent of businesses and services in the region cannot survive without BCL mine as they are directly connected. The ministry of investment, trade and industry (MITI) through the office of the Coordinator of the Economic Revatalisation of Selibe Phikwe and the Region led by Linah Mohohlo, in collaboration with SPEDU,  has developed a revitalisation strategic plan as to drive  their mandate. The strategy includes projects categorised into agriculture production and processing (already 400 hectares being developed for maize ploughing), tourism and related services, as well as manufacturing estimated at P1.8 billion and expected to created 6 856 jobs over two years. SPEDU is also targetting development of water based tourism around three big dams in the region Dikgatlhong, Thune and Letsibogo. Selibe Phikwe has also been identified as a special economic zone (SEZ) and an engine for economic growth offering lucrative incentives.