Norilsk Nickel has served notice that it intends to commence legal proceedings in Botswana against the Government of Botswana in respect of its involvement in its trading of BCL Ltd., with a view to recovering the roughly $271 million (plus damages and other costs) that they believe they are owed in relation to the sale of a 50% interest in the Nkomati mine in South Africa and the $6.4 million they are owed in relation to the sale of the Tati mine in Botswana. The Government of Botswana is the ultimate shareholder of BCL through its corporate vehicle MDCB.
The notice was served under section 4 of the State Proceedings (Civil Actions by or against Government or Public Officers) Act and was served on the Attorney General of Botswana, the Minister of Mineral Resources, Green Technology and Energy Security, and the Minister of Finance.
Norilsk had agreed in October 2014 to sell their operations in Africa to BCL for a total price of $337 million, though that amount was later reduced when Norilsk agreed to price concessions requested by BCL and the Government.
The Nkomati deal, announced by BCL as a strategic priority as part of its high-profile “Polaris II” diversification and investment strategy, was designed to guarantee the long-term future of BCL’s operations by securing the supply of concentrate to its smelter in Selebi Phikwe, Botswana. The government of Botswana, according to Norilsk, was involved in or approved all material decisions relating to this transaction. When BCL became obliged to buy Nkomati on September 13, 2016, neither BCL nor the government of Botswana, according to Norilsk, made any attempt to complete the deal.
In October 2016, Norilsk learned through the media that BCL had been placed into provisional liquidation by the government in an apparent attempt to avoid its obligations to Norilsk.