Botswana - The
streets of Selebi Phikwe in northeastern Botswana no longer teem with trucks,
and once-busy shop assistants and bank tellers wait for the rare customer.
Since
state-owned mining company BCL closed its loss-making copper and nickel
operation that was the economic lifeblood of the area two months ago, the
settlement of 50 000 has become a virtual ghost town. The government says it
can’t afford the 8 billion pula ($748 million) needed to recapitalize the mine.
Instead, it’s asked former central bank Governor Linah Mohohlo to oversee a
plan to rescue the region.
“There is
despair, anguish and sorrow,” said Dithapelo Keorapetse, one of the
town’s two members of Parliament. “The future for many is uncertain. For some
there is no future.”
The mine closure
is symbolic of the malaise among Botswana’s metal producers that bore the brunt
of the commodity price rout. The copper and nickel industries have been
decimated as a result of the BCL shutdown and the earlier closure of shafts
owned by Discovery Metals, African Copper and Tati Nickel Mining
Company. Together they accounted for about 4.5 percent of the southern African
nation’s exports in the first half of the year.
Diamonds sparkle
Botswana’s saviour
has been its diamond industry, the backbone of the economy since the first
deposits were discovered in 1967. The gems are expected to generate 27 percent
more revenue this year than in 2015, thanks to a rebound in prices and global
demand, President Ian Khama told lawmakers in Gaborone, the capital, on December
5.
While the
International Monetary Fund expects economic growth to rebound to 3.1 percent
this year, after a 0.3 percent contraction in 2015, that’s still well below the
5.2 percent annual average for the previous decade.
Established in
1956, the BCL mine employed 4 406 workers who have now lost their jobs. Six of
them committed suicide, according to Joseph Molambane, chairman of the
Botswana Mineworkers Union’s Selebi Phikwe branch. Most of the others have
returned to their home villages.
“I thought I had
a future and had not prepared for this,” said Dimpho Magang, 23, as he
waited outside the mineworkers’ union offices to register for retrenchment
payments. “I got an internship here in 2014 and had hopes of growing my career.
That’s gone now.”
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Mohohlo, who led
the central bank from 1999 until October this year, is supposed to oversee the implementation
of a plan aimed at revitalizing Selebi Phikwe and creating 6 586 jobs in the
town. The government says it will contribute 655 million pula toward
establishing 20 projects in industries such as agriculture, tourism,
manufacturing, and information technology, while Mohohlo and a state-funded
unit will seek to raise another 1.1 billion pula from private investors.
Mohohlo didn’t
respond to a request for an interview or e-mailed questions.
Buyers interested
The government
hopes to find a buyer for the BCL mine and has received inquiries from firms in
South Africa, Mozambique and Canada, according to Mineral Resources Minister
Sadique Kebonang. In the meantime, the mine has been placed under the control
of a provisional liquidator who’s due to file a report with the High Court on
February 7 indicating whether operations should be revived or shut permanently.
A recent surge
in metals prices has provided a glimmer of hope to Selebi Pikwe’s residents
that the mine could restart. Copper has jumped 22 percent on the London Metal
Exchange since the mine was shut on October 8, while nickel has advanced 12.5
percent.
“Residents of
Selebi Phikwe understand what is going on and they, together with mineworkers,
were consulted on the mine and reasons for the suspension in operations,”
Amogelang Mojuta, the town’s mayor, said by phone. Plans are being drafted and
implemented “to rescue the town. I am confident the town will survive.”
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Norman
Kelaotswe, deputy president of the mineworkers’ union, is sceptical.
“There’s nothing
government can do to replace the BCL mine,” he said in an interview. “BCL’s
wage bill was 60 million pula monthly and that was circulating in the Selebi
Phikwe economy. Nothing Mohohlo or the unit does will replace that.”
BLOOMBERG