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Mowana Mine halts operations over financial constraints

Publishing Date : 18 December, 2018

Author : REARABILWE RAMAPHANE

Mowana Mine located in the vicinity of Dukwi and Mosetse villages adjacent to the second city of Francistown is reported to have put its operations on halt due to constraints over working capital.


The company which reopened last year after closing down in 2015 has been struggling to meet operational obligation such as paying employees’ salaries and production suppliers amongst others, BusinessPost has established.
The mine resumed production in March 2017 after being purchased by Leboam Holdings from its liquidator.


Briefing a full session of Tutume Sub-council early this year the mine’s then General Manager, Mr Sebele Molalapata said the mine was Leboam’s flagship copper operation with the company planning to turn around it into a vibrant and leading copper producer in the region. 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.


The company then had to face occupational challenges in the areas of safety and environmental compliance which further hiked the operational cost at the same time putting a slow down on production and making targeted outputs even further farfetched.  “The new ownership inherited abandoned mining works, and this stalled our targeted production outputs , further stretching our balance sheet as we had to revitalize the whole earth moving plants and refurbish the machinery , equipments and some components of the processing plant,” shared the Mine MD in July this year.


Mowana then secured a conditional 40 million pula working capital facility from Fujax Minerals and Energy Limited, from which it has since drawn it down to 10 million pula. On Tuesday the company revealed that it had however reached a dead end with Fujax as they could not agree over collateral when the mining firm wanted to drawdown the rest of the facility.


“We thought it would only be fair to suspend operations while we try and 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 current General Manager, Dominic Doherty on Tuesday.
Mowana has 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.


Reports further indicate that the company has since not been able to take advantage of stable global copper commodity prices as it still continues to face equipment breakdowns which result in frequent production stoppages. Mowana mine has been the only copper mine running in Botswana, after the country’s flagship copper-nickel mine, BCL faced its demise in 2016 following government’s decision to close the mine and put it up for liquidation.


Another copper mine, Bosetu located in the North West also closed down in 2013 when its owner then, Australian Discovery Metals expressed no intention for further inject capital and instead decided to place it under liquidation. Bosetu Mine has since been bought by Khoemacau and is expected to output salable 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.


Other companies with  major undertakings in the Kalahari Copper Belt are  Tshukudu Metals a subsidiary of Metal Tiger, the latter is one of the world‘s reputable companies in the area of mining base metals. The company is at advanced explorations of the lucrative copper belt which covers areas around Ghandzi district.


Despite challenges some of these exploration companies face, especially in raising capital for their operations as well as running companies like in the case of Mowana, observers say it is not over yet for Botswana copper-nickel industry which faced a halt 2 years back due to predominantly depreciation of global commodity prices.


Charles Siwawa, an internationally recognized and seasoned mining expert who is also Chief Executive Officer of Botswana Chamber of Mines is of the view that in the near future Botswana will bounce back and be recognized amongst the likes of DRC and Zambia when it comes to copper mining industry. “The Kalahari Copper belt will give us long profitable mines with life span of 20-30 years employing thousands of our skilled and non skilled personnel,” he said at the Botswana Resources Sector Conference held in June this year.


Apart from the traditional Copper-Nickel and Coal which has been complementing the lucrative diamonds sector , Botswana’s flagship mining sector for some years , it was also revealed in more business sense terms that Botswana soils are also covering reserves of some of the most valuable industrial minerals. These includes amongst others Lead, Zinc, silver, vanadium and manganese deposits which exploration experts classify as some of the world‘s high grade deposits.

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