GABORONE, Oct 11 (Reuters) - Botswana's state-run BCL Mine has pulled out of a 3 billion pula ($281 million) deal to buy a 50 percent stake in South Africa's Nkomati Nickel Mine from Norilsk Nickel Africa due to lack of funds.
As part of a 2014 deal, BCL agreed to buy the stake in Nkomati pending South African government approval, which was only granted in August this year.
But BCL has now fallen on hard times, which culminated in the company being placed under provisional liquidation over the weekend.
Botswana's Permanent Secretary in the Ministry of Mineral Resources, Kgomotso Abi, told a news briefing that the government as the sole shareholder of the mine could no longer afford the funds needed to complete the transaction.
"Metal prices have gone down since the first time the agreement was done but our efforts to renegotiate the price down have not been successful. As of now, BCL is no longer viable and is therefore not in a position to pay that amount and we have informed Norilsk of this development," he said.
South Africa's African Rainbow Minerals owns the other 50 percent stake in Nkomati.
BCL mine has been operational since 1972 but has faced challenges in the past 20 years as the quality of its copper and nickel resource deteriorated.
Abi said following the termination of the deal, Norilsk Africa had legal options they could pursue, but "we can't comment much on that at the moment".
$1 = 10.6496 pulas Writing by Ed Stoddard and TJ Strydom; Editing by Mark Potter