GABORONE – Botswana’s top nickel miner Bamangwato Concession Limited (BCL) is sinking with a debt burden of at least P1-billion ($100-million) amid escalating costs of deep underground mining as nickel prices remain depressed on global commodity markets.
Addressing President Lieutenant-General Seretse Khama Ian Khama during a tour of the mine compound recently, mine metallurgist Enock Mukosora had said the company was struggling with subdued production, as well as reduced prices and demand for nickel in the global commodity markets.
He said the mine suffered as the price of nickel dropped from $8/lb a year ago to around $4/lb presently against a background of escalating operation and production-related costs.
Mine manager Modise Gaoetswe said mining costs had spiked on account of the deep underground mining methods the company had been forced to employ in order to access ore from the two productive shafts. In the shortest shaft, the ore is mined at least 1km underground. In the second shaft, operations are taking place 2 km underground.
Gaoetswe said the high costs of operations were also associated with the near-obsolete mine technologies still in use. However, he said because of the huge debt burden, the company could not afford new mine technologies. The option of converting the mining model to open-cast was not feasible because the remainder of the dwindling ore resources was situated too deep underground.
Currently, BCL is only making profits from the refurbished smelter plant which is now refining the local produce, as well as copper-nickel ore from the Nkomati Mine in South Africa. The company has also started smelting ore from companies in the US while negotiations are underway for the smelting of ores from Australia.