Gold prices reached $3,167.84 an ounce on Wednesday, the highest ever for the precious metal. The mineral’s entire ecosystem cheered, with miners, processors, traders, investors and governments hosting the mines, rubbing their hands in anticipation of bumper returns.
Gold is not just one of the first minerals humans being ever set value on, but it also the global safe haven that investors and indeed government resort to when economies are shaken. In turbulent times such as the current chaos set off by President Donald Trump’s global tariffs this week, gold is sought after as a historically safe store of value against the vagaries of other investments.
In Botswana, gold is one of the first minerals discovered, explored and recovered, about 100 years before the diamond miracle. Gold mining in Botswana traces back to the Mupane area near Francistown in the 15th Century and the precious metal was first mined in 1866.
Rather than joining others riding the crest of the wave in the record gold prices, the country is watching from the beach because the sole gold mine, Mupane, remains closed.
Mupane, owned by Hawks Mining, a citizen company, has not been operating since March last year owing to serious cash flow problems and alleged mismanagement. Since then, the company’s employees have been sitting idle at home without pay.
Recently, the Botswana Mineworkers Union (BMWU) put a price on the dues owed to the workers since the closure. According to the Union’s estimates, Mupane owes workers a cumulative amount of P49.1 million in unpaid salaries, terminal benefits and retrenchment packages.
Other creditors include government and related entities such as the BURS, Botswana Power Corporation and the Water Utilities Corporation.
“Financial mismanagement and other liabilities made the company insolvent,” the Union’s general secretary, Mbiganyi Gaekgotswe said at a recent briefing. “The company was initially placed under provisional liquidation, however the directors started disposing off the mine assets whilst proceedings against the company were pending before the High Court. “The Union intervened swiftly, interdicting these unscrupulous directors from dissipating the assets of the estate and securing them for payment to creditors, particularly workers as preferential creditors.”
The latest is not the first time the Union has called out alleged misconduct at Mupane. The Union was the first to raise the alarm when the mine changed hands in 2022.
From its official discovery in 1998, the country’s sole gold mine has changed ownership three times. Mupane represented the transformation of gold mining activities in the country from the single pit-based, rudimentary and stop-start efforts of the past century, to an integrated, commercial operation.
Mupane’s ownership changed from initial owner Gallery Gold, to IAMGOLD and in August 2011, to Galane Gold. In 2022, when Galane Gold announced its intention so sell Mupane to Hawks Mining for an undisclosed amount, the BMWU stepped in and lodged a complaint.
The mineworkers appealed the Competition and Consumer Authority (CCA)’s approval of the sale, citing their concerns that Mupane’s new owners had not clearly committed to taking over health obligations and issues among workers caused by the dust emanating from the mining process. In addition, the BMWU, which had raised health and safety issues at the mine with the previous owners, said these were yet to be resolved, with no clear commitment from the new owners.
With the collapse of the operation last year, the Union says its concerns about the sale have been vindicated.
“The issues with Mupane started when Mupane Gold Mine sale was announced,” Gaekgotswe said. “The Union flagged the merger notice and sale of Mupane Gold Mine at the Competition Authority, Ministry of Trade and Industry and Ministry of Minerals and Energy. “The CEO of the Competition Authority refused to see the Union such that an appeal directly to the Minister of Trade and Industry was made – which appeal was never responded to by government. “The grounds raised in our appeal and third-party notice raised issues which ultimately contributed to the liquidation of Mupane Gold Mine.”
The mineworkers say that the failure of the gold mine has exposed the lack of response capacity and inefficiency of various regulators, who include the CCA, Department of Mines and BURS. The failure, Gaekgotswe said, was particularly evident in the implementation and monitoring of the Citizen Economic Empowerment Programme (CEEP) which aims to boost the empowerment of citizens in mining.
“When the Union intervened asking pertinent issues that could have assisted Mupane directors during their negotiations with previous owners, our guidance was not heeded to. “The government and its institutions simply ignored our warnings. “Mupane Gold Mine’s failure is indicative of the glaring gaps in the implementation and monitoring of CEEP. “Further, economic transformation requires a multi-pronged and multi-stakeholder approach inclusive of the Union,” the general secretary said.
This week, Hawks Mining officials could not be reached for comment. Mmegi has failed to reach any of the directors in at least three years, while Galane Gold, the former owner of Mupane, has equally ignored requests for comment on the state of affairs.
The BMWU is proposing a business rescue scheme for Mupane which would include “a write off of liabilities especially those to government or conversion of liabilities into equity”.
The liquidators involved at Mupane will have to weigh the provable amounts of gold resources left in the various pits and any stockpile, before suggesting any plan to creditors.
The record prices might yet help the valuation of Mupane’s assets, although for liquidators this would be all in an effort to repay the millions of Pula outstanding to creditors.
Meanwhile, Mupane’s peers are uncorking champagne bottles and putting on their dancing shoes.