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Nickel producer Nornickel to sue Botswana government

Xinhua, April 28, 2017 Adjust font size:

The world's leading nickel producer, Nornickel is taking a legal action against the Botswana government over its failed sale of Tati mine in Botswana and the Nkomati mine in South Africa to the State Enterprise, BCL Mine, said Nornickel on Friday in Johannesburg.

Nornickel is demanding 271 million U.S. dollars that they are owed in relation to the sale of a 50 percent interest in the Nkomati mine in South Africa. They are also demanding the 6.4 million dollars that they are owed in relation to the sale of the Tati mine in Botswana.

Nornickel agreed in October 2014 to sell their operations in Africa to BCL for a total price of 337 million dollars, but the amount was later reduced.

The government of Botswana is the ultimate shareholder of BCL through its corporate vehicle Minerals Development Company Botswana. The Botswana government was involved and approved the sale of Nkomati mine in South Africa by Nornickel to BCL.

Michael Marriott, Nornickel Africa CEO said, "The Government has displayed a complete disregard for the fair, frank and reasonable dealing with outsiders which BCL's insolvent circumstances demanded. It has failed to honor the obligations under the sale agreement concluded with Nornickel in October 2014."

Norilsk said they have tried on numerous occasions and through numerous channels, to reach a satisfactory and amicable resolution, but none has been forthcoming. They accuse the Botswana government of recklessly handling the issue.

The company also said the government was aware of BCL's financial situation throughout, and knew or ought to have known that there was no reasonable prospect of it being able to pay the amounts due to Nornickel without its support. The company also said they were given assurances throughout the negotiations for the deal that the government was fully supportive of the Nkomati transaction.

"Throughout the process Nornickel has acted in good faith, and given the Government and BCL repeated opportunities and offers of assistance to complete the transaction, including concessions to significantly reduce the sale price," said Marriott.

Nornickel's production facilities are located on three continents and in five countries: Russia, Australia, Botswana, Finland, and South Africa. Nornickel has its own global network of representative and sales offices in Russia, the UK, China, the United States and Switzerland. Endit