Gaborone - Following the liquidation of BCL copper mine almost two years ago, another copper mine, Mowana, has temporarily closed shop.
The mine announced this week that it has halted operations due to constraints over working capital.
Reports indicate that the company, which reopened last year after closing down in 2015, has been struggling to meet operational obligations such as paying employees’ salaries and production suppliers, among others.
The mine resumed production in March 2017 after Leboam Holdings bought it from its liquidator. It is also understood that ever since resuming operation Mowana Mine has been facing challenges ranging from managerial, technical and financial limitations as the company had to refurbish the mine structures as well as the machinery which was worn out as a result of the two-year closure.
“We thought it would only be fair to suspend operations while we explore other ways of securing funding. Our hope is that the situation will be resolved soon and we can be able to restart operations,” said Mowana’s General Manager, Dominic Doherty, this week.
Mowana has a production capacity of 12,000 tonnes per annum but has, since resuming operation, only reached a maximum of 140 tonnes as of October this year compared to the targeted 392 tonnes.
The mine has been the only copper mine running in Botswana after the country’s flagship copper-nickel mine, BCL was liquidated in 2016 following government’s decision to close the mine and put it up on liquidation.
Another copper mine, Bosetu, located in the north-west also closed shop in 2013 when its owner then, Australian Discovery Metals, expressed no intention of further injecting capital and instead decided to place it under liquidation. Bosetu Mine has since been bought by Khoemacau and is expected to output saleable copper by late 2019 or early 2020. Khoemacau is one of the companies exploring and moving to mine copper and other base metals in the Kalahari Copper Belt in north-western Botswana.
The future of Botswana’s mineral sector hangs in the balance as eight mines have since been closed since 2010 shedding more than 7,500 jobs in the process, according to a report compiled by the Ministry of Mineral in 2017.
The number of jobs lost in the last seven has been a cause of great concern for the authorities. Botswana has a population of less than two million and is dependent on the mining sector from which it earns the bulk of its revenue.
The report indicated that some of the mines are still placed under liquidation while others have been reopened.
While the report would not say how many out of the 7,593 people who had lost their jobs since 2010 were absorbed when some mines were reopened, he said job losses due to closures was a burden to the country’s ailing economy.
Tati Nickel Mine owned by BCL Group of Companies was placed under liquidation in October 2016 resulting in 764 jobs losses while another mine owned by the same company called BCL Mine was also placed under liquidation and shed 5,134 jobs.
The report stated that BK11 Diamond Mine owned by Monak Ventures was closed in 2012 and 165 employees lost their jobs while Ghaghoo Diamond Mine owned by Gem Diamonds Botswana closed in March 2017 and 263 jobs were lost in the process.
Damtshaa Mine, which is owned by Debswana, closed in 2015 and reopened in October 2017 but did not have shed jobs, as its employees were transferred to other mines owned by the same company.
The mining sector in Botswana has dominated the national economy since the early 1990s. Diamond has been the leading component of the mineral sector since large-scale diamond production began 25 years ago. Most of Botswana’s diamond production was of gem quality, which saw the country become the world’s leading producer of diamond by value. Copper, gold, nickel and soda ash production also have played roles, though smaller, in the national economy.
But the voice of the private sector, Business Botswana, says the local mining sector remains viable despite closures due to unstable markets.
Business Botswana President, Gobusamang Keebine, says there is a need to engage stakeholders to see how best they can survive the harsh economic climate.
Mowana Copper Mine joins Lerala Diamond Mine and BCL mines which were shut down recently.