GABORONE Oct 11 Botswana's state-run BCL Mine
has pulled out of a 3 billion pula ($281 million) deal to buy a
50 percent stake in South Africa's Nkomati Nickel Mine from
Norilsk Nickel Africa due to lack of funds.
As part of a 2014 deal, BCL agreed to buy the stake in
Nkomati pending South African government approval, which was
only granted in August this year.
But BCL has now fallen on hard times, which culminated in
the company being placed under provisional liquidation over the
Botswana's Permanent Secretary in the Ministry of Mineral
Resources, Kgomotso Abi, told a news briefing that the
government as the sole shareholder of the mine could no longer
afford the funds needed to complete the transaction.
"Metal prices have gone down since the first time the
agreement was done but our efforts to renegotiate the price down
have not been successful. As of now, BCL is no longer viable and
is therefore not in a position to pay that amount and we have
informed Norilsk of this development," he said.
South Africa's African Rainbow Minerals owns the
other 50 percent stake in Nkomati.
BCL mine has been operational since 1972 but has faced
challenges in the past 20 years as the quality of its copper and
nickel resource deteriorated.
Abi said following the termination of the deal, Norilsk
Africa had legal options they could pursue, but "we can't
comment much on that at the moment".
($1 = 10.6496 pulas)
(Writing by Ed Stoddard and TJ Strydom; Editing by Mark Potter)