Norilsk Nickel Mauritius and Norilsk Nickel Africa have filed legal claims against BCL Limited and BCL Investments in the Botswanan courts and in the London Court of International Arbitration to recover the cash.
Norilsk agreed in October 2014 to sell its operations in Africa to BCL for $337 million. The acquisition, announced by BCL as part of its high-profile “Polaris II” diversification and investment strategy, was designed to guarantee the long-term future of BCL’s operations by securing the supply of concentrate to its smelter in Selebi Phikwe, Botswana.
Norilsk agreed to make a number of price concessions in late 2015, in view of the state of global metals markets and at BCL’s request for renegotiation. Since that date, Norilsk has consistently signalled its intent to constructively discuss any further proposals reasonably required to complete the transaction.
The transaction obtained final regulatory approvals, and therefore became unconditional on 6 September 2016; the parties were obliged to complete the deal on 13 September 2016. However, BCL made no attempts to close the transaction and Norilsk learned that the BCL had been placed into provisional liquidation in October 2016.
Norilsk Nickel Africa CEO Michael Marriott said: “BCL has failed to honour its obligations under the sale agreement concluded in October 2014. This deplorable conduct has resulted in the BCL smelting and mining operations being placed into provisional liquidation.
“The closure of BCL will have a devastating effect on the livelihoods of thousands of people, and a negative impact on the regional economies which rely on the BCL smelter to beneficiate nickel, copper and PGM concentrates.
“It is disappointing to note that the government of Botswana recently invested in refurbishing the BCL smelter, at an estimated cost of 700 million Pula, giving the people of Botswana hope that BCL had a good future with Nkomati.”
Norilsk’s assets comprise a 50% share in the Nkomati nickel and chrome mine (Nkomati). Nkomati is a large mine in the Mpumalanga Province in the east of South Africa and Africa’s largest primary nickel producer. Nkomati has since the transaction been the primary supplier of concentrate to BCL’s smelter in Selebi Phikwe, an important mining town in central Botswana and the largest local employer.
Without concentrate supplies from Nkomati – which had continued since the transaction was announced – the Selebi Phikwe smelter may become unviable, with the potential loss of more than 5 000 jobs and a negative impact on families and businesses in Selebi Phikwe, according to Norilsk Nickel.