Contractor pulls plug on troubled African Copper
Brian Benza | Tuesday November 3, 2015 18:00
In a response to Mmegi Business enquiries, Diesel Power’s parent company, Buildmax, said it has enforced its contractual right to suspend contract mining services as a result of their client’s inability to meet payment obligations.
“We have suspended operations due to non-payment but we are in discussions and taking legal advice for the appropriate action to mitigate losses.
“It would be difficult to give any more details at this point but will respond in more detail as soon as we are able to,” Diesel’s general manager of African Operations, Jacques Viljoen, told Mmegi Business.
Viljoen however declined to comment on the fate of Diesel’s 120 workers at the mine.
Under the contract, Diesel Power was to undertake mining activities at Thakadu for the first four months before moving to Mowana for the remaining 48 months with the scope of the contract involving conventional open pit mining and drilling at the two mines.
Early this year, African Copper closed its Thakadu mine and warned it might not be able to continue operating as a going concern if it did not secure additional funding, and also if international copper prices do not improve. Copper prices have not been stable since 2008.
The company added that it was conducting a review of its operations to consider various short-term and long-term strategies to meet the group’s current and future funding requirements.
African Copper’s latest financial results show that the company recorded a loss of $8.8 million (P89 million) for the six-month period ended September 30, 2014, compared with a loss of $29.1 million for the corresponding period in 2013.
In July this year the cash-strapped copper producer announced that it has secured another $2 million (P20 million) loan facility from parent company ZCI’s controlling party, the Copperbelt Development Foundation.
This brought the Botswana subsidiary’s interest-bearing loans with ZCI to $102,3 million (P1. 22 billion).
Meanwhile, African Copper has announced the appointment of Boikobo Paya, currently a Non-executive director of African Copper, as non-executive chairman of the company in succession to Roy Corrans who retired from the board with effect from September 30, 2015.
The company also announced the appointment of Thomas Kamwendo as chief executive Officer with immediate effect.
Kamwendo has been CEO of ZCI Limited since November 1, 2011 and is a member of the board of the Copperbelt Development Foundation, African Copper’s ultimate parent company.