Some Mowana Mine creditors yet to be paid

Mine was taken over by Kopano Mining Mineworkers paid P17 million

Mowana Mine creditors who were not part of the compromise scheme are yet to be paid their dues as part of the liquidation process through the Distribution and Liquidation Account.

This was revealed by Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi. He said the account will be filed on the 7th of April, 2022 and the first notice will appear in the Government Gazette on the 8th of April, 2022.

The notice, he said, shall remain open for inspection for two weeks after which the final distribution will be done and all creditors paid. He stated that the mine will extract copper and associated minerals ( traces of platinum group metals and some gold).

He explained that Mowana Mine near Dukwi Village in the Central District started operations under African Copper Plc in 2007.

Following the merger of African Copper Plc and Zambian Copper Investment ( ZCI), the mine was restructured to Messina Copper Botswana ( MCB). Moagi said being a marginal operation MCB was not spared by the dip in metal prices that was experienced in 2008.

“Thereafter the company had difficulties in maintaining a positive financial strength. MCB was liquidated through a court order granted on 15 December 2015.

“The Liquidator entered into a Liquidation Asset Sale Agreement with Leboam Holdings ( Pty) Ltd, a Botswana registered company, in terms of which the Mowana Mining licences form part of the assets of the then defunct MCB.

“Leboam Holdings entered into a conditional funding commitment with some possible financiers however, the company encountered operational challenges that hindered the company from keeping afloat its financial obligations.

“The company was placed under Judicial Management in December 2018, so that business can be restructured and re- established as a going concern,” he said when briefing Parliament on the takeover of Mowana Mine by Kopano Mining.

The Minister said Mowana Mine remained in care and maintenance for the duration of the Judicial Management until it was removed in May 2021 to allow for preparatory works to commence, following a scheme of compromise effected by the High Court in November 2021.

Max Power Mining was contracted to mine at Mowana Mine through the Compromise Scheme, the Minister elaborated.

According to Moagi, Mowana Mine has changed its business name from Mowana to Kopano Mine. However, the mining licence remains unchanged under Leboam Holdings ( Pty) Ltd. He indicated that the change of name does not affect anything in the operations or structure of the company as it was just for rebranding purposes.

“The scheme of compromise ( pursuant to Part XV and XVI of the Companies Act of Botswana) is intended to compromise the company’s obligations with respect to the creditors with a view of restoring the company to solvency.

“This will in turn trigger the cancellation of the Judicial Management Order, and the company will be returned to the hands of the shareholders. In terms of the scheme of compromise there are three classes of creditors: Trade Creditors - Claims of Trade Creditors that were proven, were to be settled by means of a minimum payment of P250, 000.00 for each Trade Creditor, and thereafter 25 percent of the value of a proven claim for all amounts in excess of P250, 000.00.

“The balance of 75 percent of the value of a Trade Creditors’ claim was to be extinguished and written off. Secured Creditor - The proven claim of a Secured Creditor would be deemed to be senior secured debt, and to be repaid on a fixedterm basis over a 12- month period commencing 24 months from the date that the scheme was sanctioned by the High Court.

“This debt was to be subordinated. Acquired Claims - These were proven claims that were acquired by the proponent of the scheme and which were to be converted into preference shares on the date that the scheme was sanctioned by the High Court,” Moagi told Parliament.

He indicated that all agreed claims of creditors that were due to be paid by the appointed Scheme Administrator in accordance with the terms of the scheme of compromise, following the approval by the High Court have been paid with the exception of BURS.

According to Moagi payment to BURS still awaits the outcome of an appeal to the Minister of Finance and Economic Development that was submitted by Leboam Holdings in respect of the claim.

He said former employees of Mowana Mine who were terminated on or before 18 December 2018 were considered as preferent creditors under the scheme and were all paid their dues being P17 million.

“There are five former employees of Leboam Holdings who have since come forward post the scheme, claiming they should have been classified as Preferent Creditors.

“It is however understood that these employees were transferred to another company that had assumed the liability for their terminal benefits and therefore were not included as Preferent Creditors in the scheme.

The matter is still being investigated, in consultation with the affected parties, but does not affect the scheme process.

“The current mining plan is for open cast extraction for the oxide ores, however, long term access to deeper sulphide ores is envisaged for underground extraction.”

MP for Nata- Gweta Polson Majaga had asked the Minister of Mineral Resources, Green Technology and Energy Security to brief Parliament on the takeover of Mowana Mine by Kopano Mining.