Norilsk Nickel is not going to abandon the deal

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Norilsk Nickel and the government of Botswana resolve the dispute because of the actions of state-owned company BCL, which planned to acquire African assets of Nornickel. Norilsk Nickel believes that the deal must be concluded.

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The Russian company is the world’s largest producer of refined nickel and palladium. Norilsk Nickel sells its own shares of companies operating in Botswana. It is all about 85% owned by the Russian company Tati Nickel east of Francistown, as well as about 50% of the shares of Nornickel in the nickel mine Nkomati in South Africa in the Barberton area. This may be beneficial for BCL because of the mines and smelter located in Selebi Phikwe, and they could successfully cooperate.

The essence of the conflict
If deal won’t be real, 5000 workers and their families can lose their jobs. It can significantly affect the situation in Selebi Phikwe and Francistown. The deal would help in creating new jobs and improving business collaboration and Botswana’s reputation as a country that’s perfect for investment. Norilsk Nickel planned to sell its African assets to BCL in October 2014.

Commenting on the turn of events after the deal was agreed in 2014, Michael Marriot, CEO of Nornickel Africa, said the deal appears to be on track until the second half of 2016.

For almost four years later Norilsk Nickel could not make a deal with BCL. In 2016 BCL began the process of liquidation. According to Norilsk Nickel, the state declined the deal in 2014. Norilsk Nickel this week stressed that it will continue the lawsuit over the facilities of Nkomati and Tati, so that the debt of about 277 million dollars was repaid. BCL could not pay off with Norilsk Nickel.

What’s more
In September 2016, Norilsk Nickel asked BCL to pay the transaction, referring to the terms of the Purchase Agreement (SPA), but this was not done. Then the government of Botswana appealed to the Supreme Court, which ended with the liquidation of BCL. As the liquidator of BCL refused to confirm that he had accepted Norilsk Nickel’s right to payment, Norilsk Nickel filed an application to the London Court of International Arbitration (LCIA) in November 2016 to determine its claims within the framework of the SPA.

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By the end of 2017 Norilsk Nickel also filed a lawsuit in the court of Botswana, demanding permission and arbitration in the LCIA. Nornickel filed a lawsuit against the government, to which the obligations of BCL were transferred.

Marriott says that he filed a lawsuit in December 2016, but the Botswana court took 16 months to make an obvious decision. “We now have an extremely unsatisfactory decision that denies the possibility of resolving this dispute through an impartial international arbitration, despite our right to do so under our contract with BCL. “Norilsk Nickel” is disappointed by the decision of the court of Botswana and is alarmed by the attitude of the authorities of Botswana to the rights of investors.”

Final decision
In March 2018, former Minister of Mineral Resources, Green Technology and Energy Security of Botswana Sadiq Kebonang claimed that “Botswana paid Norilsk Nickel $45 million to settle a dispute over the cancellation of the sale of the Nkomati mine owned by the state-owned company Botswana BCL. However, despite the official declaration, Norilsk Nickel has not yet received payments from the government of Botswana. According to Marriott, the story was extremely unpleasant for Norilsk Nickel.

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