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The company needs to iron out labour issues before completing its planned US$21 million rights issue to fund the Trojan Mine restart.
BNC chief operating officer Mr Batirai Manhando said his company had made an offer that would settle both retrenchment and backpay liabilities. The offer to staff includes cash, deferred cash, houses and BNC shares to settle severance and backpay costs.
Mr Manhando said employees could choose among various options proposed by the company.
The value of the retrenchment package has been calculated on the basis of a ruling by the Ministry of Labour in April 2012. The timing of payment of the package is now being discussed with staff.
Mr Manhando said BNC’s offer tries to balance labour’s demands and expectations with the practicality of leaving sufficient cash in the business to allow for a viable Trojan restart. About 25 percent of the total retrenchment package will be paid out in cash on retrenchment depending on the choice of employees while the balance would be paid either via BNC shares immediately on the same terms as those for the rights issue, or cash in two years following retrenchment.
Alternatively, by taking shares, staff could participate in the long-term growth of BNC alongside other shareholders. BNC currently has a staff complement of over 2 000 employees.
Given that the company will pursue a phased restart strategy, initially focusing on Trojan, it is not financially viable to retain a full staff complement.
Mr Manhando said the cash flow that would be generated by Trojan could not support a full complement of staff across the whole BNC group. To this end, the company has had to make the difficult decision to retrench several employees to ensure a viable restart for Trojan.
When BNC ceased operations and went into care and maintenance in 2008 — in a bid to avoid bankruptcy — the company was forced to pay staff not involved in the care and maintenance programme salaries below the prescribed NEC minimum wage.
Staff had taken action against BNC, claiming the company should pay out to staff the historical discrepancy between the prescribed minimum wage and what BNC could afford to pay — thus creating a backpay liability.
Pursuant to the offer, both parties are expected to stop all legal proceedings should staff reject the offer from the company.
Mr Manhando said should consensus be reached with staff and the rights issue proceeds, BNC still has an upside once operational. He added that the company also intended to review restart options at its smelter and refinery, and, developing its world class Hunter’s Road project. However, he added, the current focus was on cleaning up the company’s balance sheet and getting the Trojan Nickel Mine restarted.
Management is optimistic the company will avoid liquidation.
“Unfortunately the company faces a stark and difficult choice – liquidation, or, a streamlined Trojan restart, thus saving at least some jobs with the possibility of creating more in the future as we restart other BNC assets.
With those choices on the table, the BNC board had to make the difficult decision to go for retrenchment and the streamlined Trojan restart,” said Mr Manhando.
Online Reporter