Uncertainty looms over Hawks Mining operations
FRANCISTOWN: Seismic pressures reverberated within and beyond the mining industry following the recent temporary shutdown of operations at Botswana’s sole gold mining company, Hawks Mining Company (HMC).
HMC, a majority citizen-owned company, was previously known as Mupane Gold Mine (MGM) and was owned by a Canadian company, Galane Gold, an unhedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa before it was acquired by HMC.
Last week, the Botswana Mine Workers Union (BMWU) released a statement suggesting an imminent closure of HMC, potentially leading to massive job losses (205).
MP for Francistown South, Wynter Mmolotsi, weighed in on the issue, stressing the need for an urgent solution to address the challenges faced by HMC.
Mmolotsi, a vocal advocate for the reopening of TNMC in Parliament, emphasised the urgency of resolving the problems affecting HMC, expressing concerns about potential job losses in the mining sector.
He urged the government, through the Minerals and Energy ministry, to intervene promptly to address the issues at HMC and gather firsthand information about the situation.
Mmolotsi, who expressed having sleepless nights, proposed government intervention, suggesting options such as purchasing shares in HMC and cancelling the debts owed to entities like BPC and WUC to prevent mass job losses.
“There is an urgent need for the government to go and listen to both the employer and employees (through the BMWU) about what is happening at HMC to lend a helping hand. The overarching aim of the government in this issue is to safeguard massive job losses that may occur if the financial situation of HMC does not improve. The government can alternatively buy shares in HMC and cancel the debts that HMC owes to BPC and WUC,” said Mmolotsi.
In its statement, BMWU expressed concerns that HMC may face imminent liquidation due to financial mismanagement by its citizen directors. This mismanagement has led to non-payment or late payment of employees’ wages for the past six months and services contractors since October 2023.
“MGM, acquired by Hawks Mining, a citizen-owned company in 2023, is on the verge of closure due to financial mismanagement by its citizen directors. HMC is in serious financial distress, with inconsistent payment of basic wages to employees since September 2023 and temporary shutdowns due to failure to pay service providers, including Botswana Power Corporation (BPC) and Water Utilities Corporation (WUC),” reads part of the BMWU statement.
The BMWU finalised its statement by demanding that the government instruct BPC and WUC to write off HMC’s utility debt, intervene swiftly to save HWC employees’ jobs and acquire the shareholding of HMC through the Minerals Development Company Botswana (MDCB) to recapitalise the business.
MDCB is an investment company managing mining and minerals assets for the government of Botswana.
From the beginning, BMWU has been sceptical about HMC fulfilling its obligations, especially to workers, after MGM sold it to HMC for a “nominal fee”.
Initially, BMWU planned to oppose the sale of MGM to HMC before the Competition and Consumer Authority (CCA) approved the acquisition.
The CCA stated that the proposed transaction is unlikely to affect competition or the continuity of gold ore mining and processing in Botswana since Mupane is the country’s sole gold mine.
The possibility of Botswana’s sole gold mine closing has raised concerns. Gold mining at HMC significantly contributes to economic activity in Francistown and beyond, and the permanent closure may negatively impact not only the economy of Francistown but Botswana as a whole.
The closure of HMC and its liquidation would be a double blow to the economy of Francistown, as Tati Nickel Mining Company (TNMC) closed in October 2016, leaving many unemployed. TNMC employees played a significant role in the economy of Francistown and surrounding areas through rentals and other means.