Botswana to keep unprofitable copper miner alive just to save jobs
Botswana's state-owned BCL, the country’s biggest copper and nickel miner, will continue to receive about $130 million (1.4 billion pula) a year, even if the company has to stop mining, the country’s vice president said.
Speaking to Bloomberg News, Mokgweetsi Masisi said the copper and nickel producer, which employs as many as 5,000 people, noted the country will sell its stake in BCL as soon as it returns to profitability.
Botswana's vice president said state-owned BCL was an unprofitable, unsustainable and expensive business.
But at some point, he said, Botswana may need to stop pouring money into the ailing miner. “[While] we have got about 15 more years to go, [the company’s output is] deep, poor-quality ore — it’s like flagging an old woman and asking her to run in the Olympics,” Masisi said. “It’s unprofitable, unsustainable and expensive.”
The southern African country, the world's biggest diamond producer, has seen revenue drop dramatically in the past year.
Exports of diamonds mined in the country fell 38% to $2.4 billion in 2015, Botswana's lowest shipment of gems in six years.
And while copper has rallied 12% from mid-June to mid-July, topping out at $5,032 last week, it is still trading at the lowest average price in the last six years.
As a result, Botswana’s government expects mining revenues to fall by at least 8% this year.