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Mowana mine faces possible liquidation

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BLEAK FUTURE: The troubled Mowana mine

Two creditors are said to have made an application to the High Court for the liquidation of the troubled Mowana Copper Mine.

The struggling mine – which prior to suspending operations weeks ago, has been the only operational copper mine in the country.

Mowana Copper Mine, owned in majority by Cradle Arc with 60 percent and the remaining 40 percent by Fujax Minerals, has been struggling with cash flows, resulting in the inability to pay staff salaries, services and other debts.

In a communiqué addressed to staff on Monday this week, the company said it is aware of the two applications that have been made by creditors of the company to the High Courts of Botswana to place the company under judicial management or provisional liquidation.

One of the creditors that have apparently made the application is another shareholder, Fujax, together with another unnamed creditor.

It comes as no surprise that creditors have allegedly applied for the judicial management of the company, as early this month; operations were suspended at the copper mine situated near Mosetse and Dukwi villages.

It is reported that Mowana had a $4 million conditional working capital facility from Fujax Minerals, from which it had already drawn $1 million.

However the two reached a dead-end when they could not agree on collateral when Mowana sought to drawdown the rest of the facility.

It will not be the first time that Mowana is put under liquidation.

The mine went into liquidation in 2015, before reopening in March last year under new ownership.