Liquidated BCL mine has finally sold its precious asset in Selebi Phikwe, latest information shows.  

Local broker, Motswedi Securities had initially found that the mine’s smelter was an opportunity that could be actively pursued given its potential to become a “game changer.” 

According to the initial analysis by Motswedi Securities, “The Bcl smelter is one of the projects we believe has the potential not only to contribute positively towards the profitability of BCL but also turn Botswana into a hub for the smelting and refining into a hub for the smelting and refining of copper /nickel in the region.’

Motswedi Securities  said at the time that the with a capacity to treat up to 850 000,l of nickel /copper concentrates per annum , the smelter is large enough to absorb all smelting miners in the region as it is the only copper nickel; smelter mine the region.

“This is because it would  be uneconomical for other mining companies in the region to build their own refineries given the large capita; outlay that is required to build one, it is estimated that the current value if the smelter is between USD 2 billion and 3 billion” Motswedi Securities also said at the time. 

In the latest report, Acting Chief Executive Officer, Nomathemba Dladla, indicated that the BCL asset being acquired consist of certain business assets owned by BCL, which were used in the Selebi Mine, more particularly the property, slag, tailings, mining and processing assets from its mining and smelting facility as situated on the BCL lease area. 

She explained that; “It is important to note that, as an entity, BCL is not disposing off its shares but it is selling its certain business assets. BCL is wholly owned by the Government of the Republic of Botswana. BCL Limited has been in Liquidation since October 2016 and its affairs are under the control of the liquidator, Sivalutchmee Darusha Moodliar N.O. (South African).”

Dladla said the assessment indicates that Sherashiya is a steel works company that produces industrial steel products and exports them. Sherashiya controls a steel plant in Selebi-Phikwe which was previously owned by Pula Steel and Casting Manufacturing Proprietary Limited. The plant is currently used to manufacture steel billets from steel scrap and shall provide for the subsequent conversion of the billets into end products including angle irons, round bars, man-hole covers, pots, fencing products and other products in the near future. 

With regards to BCL, Dladla said prior to being placed in liquidation in 2016, the BCL ran the BCL mine (now in care and maintenance) which produced nickel-copper-cobalt group metals (Ni-Cu-Co). These minerals were smelted into a high-grade sulphide matte, containing nickel, copper and cobalt, which were then exported to international markets, she said. 

Dladla noted that Sherashiya is only buying liquidated assets owned by BCL through a disposal process undertaken by the Liquidator to raise money to pay the main creditor of BCL being the Government of Botswana. She said based on the fact that the properties being disposed are part of the liquidation process and that the BCL hospital is not being sold as an operating entity, the Authority maintains that it is not necessary to reach a definitive view on the exact scope of the product market as the market structure is not expected to substantially change post implementation of the proposed transaction.

She said the assessment has revealed that the merging parties are currently not active in the same market. Sherashiya processes and produces steel billets from steel metal scrap and export the same to other countries markets such as Zimbabwe, Uganda and India. On the other hand, BCL has been in liquidation since October 2016 and is considered to be active by virtue of being constantly engaged in various asset disposal transactions which amount to gain or reward with possible effects on competition in the relative markets. 

The Competition and Consumer Authority, therefore does not anticipate the acquisition to result in any substantial lessening of competition post implementation due to the fact that the target assets have been under care and maintenance and will only be utilised under the ownership of Sherashiya post- merger.

Dladla said since Sherashiya is not active in the production and processing of Ni-Cu-Co, a market in which BCL was active in Botswana, the proposed transaction will not result in any accretion in market share, in any relevant market in Botswana. 

“In terms of Public Interest considerations, it is important to highlight that the current acquisition is to ensure that certain raw materials are obtained from the assets being acquired which are to be used as input steel metal scrap in the Pula Steel plant,” said Dladla.

 She said in line with commitments made by Sherashiya is to ensure that the steel metal scrap which is intended to be used as an input for the Pula Steel plant is not exported out of Botswana to facilitate economic growth in other countries.

Therefore, the Competition and Consumer Authority decided to approve the proposed acquisition by Sherashiya  of certain assets of the business of BCL Limited (In Liquidation), with the following conditions:

That there shall be no exportation of steel metal scrap generated from the target assets and therefore the steel metal scrap obtained from BCL that forms part of the current transaction must be used as an input raw material for the Pula Steel plant as per the commitment of Sherashiya;  Sherashiya must invest in the installation of a rolling mill in order to produce consumable products through the conversion of billets into end products including angle iron, round bars, man-hole covers, fencing products and other products.