[miningmx.com] – SPEAKING to Australian investors in August, South African mines minister, Susan Shabangu, said: “. the table has been laid in SA . and what is left is for our Australian friends to take their rightful place in African development’.
Quite what Australians will be making of that invitation to feast and recent developments involving R8bn, mid-tier Sydney-listed mining company, Aquila Resources, is anyone’s guess; probably, not much.
Aquila Resources is the company that said it’s considering taking Government to court after the state failed to award it the right to mine a section of its manganese prospect, Gravenhage, which is part of the proposed 148 million tonne (mt), $180m Avontuur manganese project in the Northern Cape province.
Its mining licence application had been accepted but not awarded amid a recent notification of a rival application made much later by a company called Pan African Mineral Development Company (PAMDC).
Conflicts over the right to mine mineral deposits has been a characteristic of South Africa’s mineral development industry since the promulgation of the Minerals & Petroleum Resources Development Act (MPRDA) in 2004. The high profile, three-way clash of interests involving Kumba Iron Ore, ArcelorMittal SA and Imperial Crown Trading (ICT) is the most famous example.
The award of rights to market some of the by-product minerals from one of Lonmin’s platinum mines to former director-general, Sivi Gounden’s HolGoun Group in 2011 was another, a conflict resolved a year later after HolGoun Group was paid $4m by Lonmin for the rights.
In both cases, it was suspected the interloper had political means. In the case of PAMDC, however, it clearly is the government: three goverments in fact.
PAMDC was formerly the National Railways of Zimbabwe (ZIZA) and before 1980, Rhodesia Railways. In the colonial era, ZIZA operated rail routes through southern and northern Rhodesia or Zimbabwe and Zambia respectively. That’s why ZIZA’s shareholders consist today of these southern Africa governments.
PAMDC was created in 2007 as a new joint venture company aimed at taking over the diamondiferous concessions in South Africa. At the time, the Zimbabwean government appointed two of its cabinet members to PAMDC’s board, and there were even plans to list it on the JSE.
In another sinister back story, the late Brett Kebble concluded a deal with PAMDC in 2003 via his catch-all wealth vassal, Randgold & Exploration, to manage the firm’s South African interests which, worryingly for existing miners seeking to develop new mining fields, covers a vast 1.6 million hectares of land in the Northern Cape and Limpopo provinces. Before Randgold & Exploration, De Beers had stewardship of ZIZA’s rights.
The worry for manganese, iron ore and coal explorers operating in these provinces is whether they, too, will have significant exploration discoveries gazumped by PAMDC once they are applied for.
Michael Halliday, head of Aquila’s operations in South Africa, said on September 23 that the company had given the Department of Minerals Resources 30 days to respond to its claim to have its mining right awarded. It would then turn to the courts.
There is almost no chance of Government relenting on its position. According to a source, Shabangu told Aquila Resources that the award of its prospecting right roughly five years ago had been “a mistake’.
Incidentally, the competing application for a mining right at Gravenhage puts the interests of former DMR official Nchakha Moloi, and Nonkqubela Mazwai, a former stockbroker and founder of Motjoli Resources, also into question. The two are the principals in Rakana Consolidated Mines, Aquila’s empowerment partner as stipulated by Government’s MPRDA.
“It is regrettable that Aquila now needs to consider legal action to protect the security of its tenure on the Gravenhage Manganese Deposit, having advanced the project since 2006 in accordance with all relevant laws and DMR requirements,” Halliday said in a statement
He isn’t the first to express regret, then go to court. Government has been taken to court many times before on minerals rights claims; one as early as 2006 when Anglo Platinum and Anglo Coal considered it.
Mining rights are even being tested in the Constitutional Court as the DMR appeals the award of rights to Kumba Iron Ore over Sishen Iron Ore Company while who knows where the alleged bribery over the mining right to the South Deep gold mine involving members of Government in empowerment company Invictus Gold, and Gold Fields will end up. Some feast.
