Norilsk Nickel (Nornickel) recently said that it settled its three-year dispute with the government of Botswana and BCL Group over the sale of its assets, which included a 50% stake in the Nkomati joint venture.
The group was made up of BCL limited and Tati Nickel Mining Company.
The Russian mining company said, without disclosing the amount, that it had received cash compensation.
The parties, it said, agreed to waive all claims against each other in connection with the transaction.
Nornickel withdrew its claim against BCL in the London Court of International Arbitration (LCIA) and is also working on terminating its court proceedings in Botswana against the government.
It signed a sale agreement with BCL Group for the sale of its interests in the Nkomati and Tati mines in October 2014.
The agreement became unconditional in September 2016, but BCL did not complete the transaction.
Gaborone, the ultimate shareholder of BCL, then successfully petitioned the High Court of Botswana to place BCL into provisional liquidation in October 2016.
Irked by the move, Nornickel consequently filed a claim against BCL in the LCIA and a claim against the government of Botswana in the High Court of Botswana, claiming that Gaborone was liable for BCL's debts to Nornickel.
Nornickel terminated the sale agreement in 2018 as a result of BCL's breach of contract but pursued its claims against the government of Botswana and BCL.
“The settlement brings this matter to a close as per the agreement of the relevant parties,” the Russian miner said.
Although the amount paid to the Russians remains a mystery, Botswana’s Sunday Standard notes that when Nornickel served a material breach notice on BCL, it demanded payment of the $277 million purchase price.
Botswana’s former finance minister Kenneth Mathambo also tried to convince legislators to approve the negotiated fee of $45 million to be paid to Norilsk as an out of court settlement.
This would have seen the government only paying a fraction of the $277 million that Norilsk had demanded.
So Botswana’s members of parliament thought it was prudent to approve the negotiated $45 million.
When it appeared as if that a deal had been sealed, then mineral resources minister Eric Molale, revealed in July 2018 that the BCL liquidator objected to paying Nornickel.
The liquidator posited that the Russian miner had no legitimate claim to the negotiated $45 million.
“He then went to court in South Africa and recently lost the case. That is why I’m saying that my hands are tied because this liquidator is a court official,” Molale said then.
“To try and tell him what to do, I will be regarded as interfering in the judicial process. That is the conundrum I am facing.”
As Nornickel celebrated what had transpired in the South African court, the champagne bottles were quickly put back in the ice.
Why? The Botswana court delivered a judgment preventing Nornickel from taking the case to LCIA.
Nornickel then decided to revert to its initial demand of $277 million when the liquidator threw spanners in the wheel.
This piled pressure on the government that tried to stave off repercussions of the BCL Group liquidation.
“The settlement coincides with the Botswana government’s September decision to sell the defunct BCL mines to Canada’s Premium Nickel Resources, with the view of reopening the mines that employed thousands of workers,” notes Botswana’s Sunday Standard.
“The BCL mine is expected to be back in production within three years.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
