Norilsk Nickel is seeking its “pound of flesh” to the tune of US$270 million (about P2,5 million) from the Botswana government over a botched deal by BCL to buy a 50-percent stake of its Nkomati Mine in South Africa last year.
The Russian mining giant on Thursday served notice to sue on the Minister of Mineral Resources, Green Technology and Energy Security, Sadique Kebonang, and the Minister of Finance and Development Planning Kenneth Matambo and the Attorney General.
Norilsk Nickel announced on its website on Friday that it intends to sue the government of Botswana “in respect of its involvement in the reckless trading of BCL Limited and BCL Investments Proprietary Limited (together “BCL”), with a view of recovering $271 million plus damages and other costs that are owed to Norilsk Nickel in relation to the sale of a 50 percent interest in the Nkomati Mine in South Africa and $6.4 million that are owed to Norilsk Nickel in relation to the sale of the Tati Mine in Botswana.
Botswana is the ultimate shareholder of BCL through its corporate vehicle MDCB,” the statement reads.Norilsk agreed to sell operations including its 50 percent stake in South Africa’s Nkomati Mine to BCL Group for $337m in 2014, later reducing its price to $271m. But BCL filed for liquidation in October last year just before the transaction was due to be completed, with the Botswana government claiming that it was unable to afford the purchase.
Sources close to the lawsuit say Norilsk will argue that despite approval of the Nkomati deal at the highest levels, the government enclave was aware of BCL’s financial condition and knew that it was unable to complete the deal without state funds.“Why did BCL enter into the transaction knowing it couldn’t afford the purchase price?” one lawyer familiar with the case said.
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