[miningmx.com] — THE administration of the Quattro coal export scheme has been changed by the department of mineral resources (DMR) because of alleged fraud.
In reply to an article published by Miningmx on Monday concerning the change of management, DMR spokesperson Bheki Khumalo said on Tuesday that at least R5.5m had been misappropriated from former scheme administrator Mhlatuze Bay Coal Administrators (Mhlatuze).
He said: “We are in possession of documentation that clearly demonstrates how a former employee of Mhlatuze defrauded the organisation of huge sums of money.
“Preliminary indications suggest that a sum of R5.5m has over time been fraudulently withdrawn from the bank accounts of Mhlatuze.
“The investigation is not yet complete as there are strong suspicions that the amount involved maybe higher than R5.5m. However, criminal charges have been formally instituted against the suspect and the matter is being handled by the Commercial Crimes Unit in central Johannesburg.
“In order to prevent further misappropriation of Quattro funds, the department has decided to remove the administration of Quattro from Mhlatuze to UBU Logistics.
“We shall leave no stone unturned in our quest to ensure that all those involved in the misappropriation of Quattro funds are brought to book. “
Khumalo confirmed that the DMR legally had no “oversight role’ in the affairs of Mhlatuze but said the DMR was an “interested party’ because “we are the custodian of the four million tonnes of export tonnage that Mhlatuze administers for BEE (black economic empowerment) junior coal producers.
“It would therefore be a gross dereliction of duty on our part if we were to fold our arms when we see that things are not going well at Mhlatuze.
“It is precisely for this reason that the department acted decisively when it uncovered some maladministrative practices at Mhlatuze.’
The DMR is responsible for allocating export quotas to the participants in the scheme, which is supposed to be for the benefit of BEE companies mining their own coal for export.
One of the criticisms voiced against the scheme – as reported by Miningmx – is that some members are not mining their own coal but trading coal bought in from other companies.
Khumalo said: “There have been incessant complaints from junior BEE coal producers and other players in the industry that the programme primarily benefits traders and some large mining companies instead of the junior BEE coal producers.
“This remains a mystery to us because the terms of reference for Quattro unequivocally indicate that the intended beneficiaries of the programme are junior BEE coal producers, and that traders and long-term commercial users of the Richards Bay Coal Terminal are strictly prohibited from participation in the programme.
“There have also been allegations of fronting levelled against some Quattro members. We are fully committed to eradicate fronting and other forms of business malaise that were afflicting the programme.
“We have accordingly requested, at the end of last year, all Quattro members to reapply for their export allocation. The department has completed the evaluation of the applicants and the matter will be finalised before the end of the month.’
Mhlatuze executive Bill Lamont was not immediately available for comment.
Lamont had declined to comment when first approached by Miningmx on Monday about the switch in management of Quattro from Mhlatuze to UBU Logistics.
