The deal pertaining to the sale of Russian mining firm Nornickel’s African assets to Botswana-based BCL Group has collapsed after the former ended a previously signed agreement.

nkomati mine

Image: The Nkomati nickel is owned under a JV between Nornickel and African Rainbow Minerals. Photo: Courtesy of African Rainbow Minerals.

The deal pertaining to the sale of Russian mining firm Nornickel’s African assets to Botswana-based BCL Group has collapsed after the former ended a previously signed agreement.

Nornickel stated that the agreement with BCL was terminated due to the latter’s breaches of contract.

The company signed an agreement with BCL in October 2014 for the sale of its interests in the Nkomati and Tati nickel mines. BCL agreed to purchase a 50% stake in the Nkomati joint venture. The remaining 50% interest in the JV is held by African Rainbow Minerals.

Nkomati is located in the Mpumalanga province in South Africa. In April 2015, Nornickel completed the sale of its 85% stake in Tati located in Botswana to BCL.

However, the Botswana government filed an application in the High Court of Botswana in October 2016 to allow provisional liquidation of BCL assets.

Following the termination of the transaction, Norilsk now intends to pursue its own strategy for the African assets.

Norilsk Nickel Africa chief executive Michael Marriott said: “We delivered on all of our obligations to the BCL Group and are dismayed by their unwillingness to engage in a constructive dialogue with a foreign investor.

“Sadly, different branches of Botswana’s government and BCL’s representatives failed to agree on the approach to resolving the dispute, and in spite of the announcements by top public officials, the dispute with Nornickel has not been settled.

“Given that the BCL Group will not be purchasing our interest in Nkomati, we will now pursue our own strategy in respect of the African assets.”

Marriott added that the company will seek damages from BCL Group and the Botswana government.

In June this year, a Botswanan court turned down the firm’s request to pursue its claim for damages in the London Court of International Arbitration (LCIA). The company appealed this ruling and a hearing is expected to take place next month.