BCL mine closure affects Selebi-Phikwe

BCL mine closure affects Selebi-PhikweCommodity price affects Botswana A slump in commodity prices has rendered Botswana''s north-eastern mining regions lifeless, turning once-vibrant settlements into ghost towns. The streets of Selebi Phikwe in north-eastern 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 Ltd 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 US$748 million needed to recapitalise 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 Ltd, African Copper Plc and Tati Nickel Mining Co. Together they accounted for about 4.5% of Botswana''s exports in the first half of the year.

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 7 February 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 8 October, while nickel has advanced 11 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.”

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 BWP60 million monthly and that was circulating in the Selebi Phikwe economy. Nothing Mohohlo or the unit does will replace that.”

BLOOMBERG