Norilsk Nickel files lawsuit against Botswana over Nkomati stake sale

Norilsk Nickel files lawsuit against Botswana over Nkomati stake sale
May 04 11:24 2017 Print This Article

Norilsk Nickel Africa- a Russian miner has proceeded forward to file a lawsuit against Botswana government in order to recover an amount of more than $271 million while a state-backed mining company failed to sell 50% of its stake in Nkomati Nickel mine.

BCL Group is that state-backed mining company owned by the Botswana Government that formulated a deal with Norilsk Nickel which said that Norilsk will be selling 50% of its stake in Africa’s Nkomati mine as well as its operations for $337 million 2014 which was later abridged to $271 million. But later in October 2016 BCL filed for an evacuation from the deal reason being not being able to compensate the purchase price. In order to focus more on its mines in Russia, Norilsk gave up its equity in Africa.

Norilsk Nickel is classified among the world’s top ten copper, nickel and palladium mining and smelting company. While having a head quarter in Moscow they have successfully running operations worldwide including Finland, southern Africa and Australia etc. Nkomati nickel mine is an alliance between Norilsk Nickel Limited and African Rainbow Minerals Limited.

As stated by Michael Mariott, the chief executive of African Operations at Norlisk, the approach of Botswana Government towards this issue has raised questions on its reputation. The consequences with utter negativity can be felt across the economy stakes of the country.

Botswana is one of the most highly rated and dominating country for mine investments in Africa. It’s been ranked 12th out of 104 governments globally for holding firm stability of its policies. Due to such exquisite reputation in mining business the investors would closely follow Norilsk accusations against Botswana.Diamond being considered as the most premium asset in Botswana, which made them,appears as the world’s top diamond producers by value.

Norilsk stated that, in September 2016 the sale of its stake in Nkomati mine was finished off and consummated after profuse endorsements from Botswana government that they will be able to accommodate the purchase price. While a month later BCL filed a request for the liquidation of the transaction. The government was responsible for the completion and funding of the deal which the state miserably failed to accomplish.

Before an assessment takes place in London, Norilsk is waiting for adjudication to be issued by the Botswana court.While on the other hand Botswana is contemplating to float and retain its integrity by selling off the three companies owned by BCL to Emirates Investment House (EIH).

If the revenue gained after selling these BCL companies are plentiful and adequate, the government will pay off the dues to Norilsk and terminate the accusations put up by the Russian company.

According to Marriot, A fair share from the deal is what Norlisk pursue from the lawsuit against the Botswana regime.

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