South African Court to decide on Norilsk Nickel’s mineral rights dispute with BCL

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A South African court will decide the success of Norilsk Nickel’s $277 million claim against Botswana’s BCL miner and refiner. Norilsk Nickel, Russia’s largest palladium mining and smelting company, has tried to shred the reputation of Botswana as Africa’s most highly regarded mining destination.

Business Day South Africa reports that there has been a standoff between the Russian company and Nigel Warren-Dixon of KPMG Botswana, who is leading the BCL liquidation. The dispute can be traced back to 2014, when Norilsk struck deals with BCL to sell 85% of its stake in Tati Nickel Mine in Botswana and its 50% stake in South Africa’s Nkomati Nickel to the state run Nickel producer for $337 million, but the price was later dropped to $277 million.

The agreement however suffered a setback when the Botswana High Court ruled that Norilsk had overstepped the mark, by starting an international arbitration process to recover the $277 million owed by BCL and the Botswana government.

BCL and the Botswana government have not paid Norilsk and the latest battleground is taking place in a South African court. Warren-Dixon argues that the Director General of the Department of Mineral Resources, cannot agree to the transfer of mining rights to BCL’s wholly owned subsidiary because of the company’s bad finances.

If Warren-Dixon succeeds and transfer of the rights is rescinded, Norilsk’s case will be thrown out, since securing the right was one of the key conditions for conclusion of the transaction.

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