…Blames Cashflow Woes Not Merger Approval
The Competition and Consumer Authority (CCA) has distanced itself from the collapse of Mupane Gold Mine, insisting that the mine’s failure was the result of operational and cashflow challenges rather than flaws in the authority’s merger approval process.
In its 2024/25 Annual Report, under the Impact Monitoring Assessment section, the CCA concedes that the anticipated benefits of the Mupane Gold Mining and Hawks Mining Company merger were never fully realised. However, it maintains that responsibility for the mine’s failure does not lie with the regulator.
“For the 2024/2025 Impact Assessment, the Authority assessed the following transaction: Mupane Gold Mining and Hawks Mining Company,” the report states. It adds that the Authority was “not satisfied with the impact results emanating from its approval considering the commitment undertaken by the Merged Enterprise and the period of implementation.”
The merger, approved in April 2022, was expected to remain in force for more than ten years and deliver wide-ranging benefits to Botswana’s economy. These included citizen empowerment through share acquisition, prioritisation of citizen-owned companies for subcontracting, job security for employees over a decade, and sustained contributions to the fiscus through mining royalties and taxes.
The CCA argues that because operations were halted prematurely, all merger commitments became temporary in nature. “The insufficient impact by the Merged Enterprise was purely due to its operational challenges and not the Authority’s merger analysis and crafting of merger decisions,” the Authority states.
Instead, the merged operation lasted for barely two years. According to the Authority, business operations were suspended on 22 March 2024 due to “operational and cashflow challenges among other things which led to poor performance.” By the end of July 2024, all employee contracts had been terminated, and the mine was placed under provisional liquidation.
“The business of the Merged Enterprise is currently on provisional liquidation and contracts for mine employees were terminated at the end of July 2024,” the report notes. “Therefore, the shareholders of the Merged Enterprise are no longer in charge and the responsibility and accountability of the mine reside with the Liquidator.”
The CCA argues that because operations were halted prematurely, all merger commitments became temporary in nature. “The insufficient impact by the Merged Enterprise was purely due to its operational challenges and not the Authority’s merger analysis and crafting of merger decisions,” the Authority states.
The regulator further contextualises its position by referencing international best practice, noting that impact studies or ex-post evaluations are a critical tool for assessing merger outcomes. Citing the OECD, the report explains that such evaluations help determine whether imposed conditions were sound and whether assumptions made at the time of approval were reasonable.
“A reasonable time frame to conduct ex-post reviews is usually three to four years post the implementation of a merger,” the report states, adding that this period allows sufficient time for benefits to materialise.
In Mupane’s case, the Authority argues, the merger collapsed well before such an assessment window could reasonably establish long-term outcomes, effectively cutting short any opportunity for the projected economic and social gains to be realised.
