Botswana state-owned copper mining firm BCL has reached an agreement to buy stakes in two nickel mines in South Africa and Botswana for $337 million from Russia’s Norilsk Nickel, the world’s top nickel and palladium producer.

The deal effectively ends Norilsk’s African business interests following the sale of Nkomati Nickel, which the company jointly owned with JSE-listed African Rainbow Minerals (ARM).

BCL also acquired Norilsk 85% stake in Tati Nickel Mining in Botswana towards the end of last year.

Expansion drive

The deal is part of BCL’s expansion drive and the acquisition of the mine in South Africa is the company’s first significant investment in Africa’s second largest economy.

Norilsk, which has also sold its assets in Australia, is focusing on its largest and lowest-cost assets. It described the African assets sale as the largest in its disposal programme, unveiled last October.

“This marks Norilsk Nickel’s full exit from its African business, which together with earlier disposals of Australian assets represents the complete exit from international operations marked for disposal,” said first deputy CEO Pavel Fedorov.

Supply agreement

BCL will also take over from Norilsk Nickel subsidiary Metal Trade Overseas AG (MTO).

MTO will enter into an agreement to buy nickel matte from BCL, which the Russian company will process at its Harjavalta refinery in Finland.

Both companies also agreed that BCL will also assume all attributable outstanding debt and environmental and rehabilitation liabilities associated with the assets.

BCL’s Chairman of the Board of Directors Akolang Tombale said in a statement that the acquisitions showed that the company is evolving as a major regional player highlighting the company’s strong metallurgical complex.

Regulatory conditions

Completion of the deal is subject to regulatory approvals and customary closing conditions.

After the completion of the deal BCL will treat concentrate from both Tati Nickel and Nkomati at its smelter in Botswana, which is expected to optimize the company’s operations and deliver economic and social benefits to the region.