Botswana's BCL Ltd. is backing out of a deal it made in 2014 to acquire PJSC MMC Norilsk Nickel's 50% stake in the Nkomati nickel joint venture in South Africa due to its inability to afford the US$279 million price tag, Bloomberg News reported Oct. 11, citing Khaulani Fichani, chairman of the state-owned company.
The news comes a day after Norilsk Nickel vowed to defend its interests in the stake sale, as BCL failed to close the deal despite being given additional time. Earlier this week, the government of Botswana asked the high court to place the copper and nickel producer, BCL Mine Ltd., under provisional liquidation due to unprofitability.
In 2014, Norilsk agreed to sell its 50% interest in the Nkomati property and an 85% stake in Tati Nickel Mining Co. Pty. Ltd. to BCL for US$337 million in cash. BCL said in April that it was planning to raise US$250 million via bonds to fund the acquisition.
"The kind of situation we are in, where's that money going to come from," Fichani was quoted as saying. The acquisition of the mine would have enabled the company to keep processing metals, given its aging mine reserves.
The Nkomati mine in South Africa is jointly owned by Norilsk Nickel and African Rainbow Minerals Ltd.