King Zuma’s Mines

2011-02-19 18:19

The state’s new mining company – heralded by some as a triumph for those pushing for nationalising South Africa’s mines – is bidding for no fewer than 128 ­prospecting and mining rights, and the scale of its intended operations has ­taken the ­mining industry by ­surprise.

It has already been awarded 10 ­prospecting rights, with another 16 in the final stages of approval and the balance at various stages of ­being processed.

This was ­established by City Press from ­published records of the Department of Mineral Resources.

The data sheds new light on the scale of operations of the state’s newly revived mining company – the African Exploration Mining and Finance Corporation ­(AEMFC) – which ANC Youth League leader Julius Malema has hailed as proof that the league’s push for ­nationalisation has worked.

This has been ­denied by ­President Jacob Zuma.

During his state of the nation address last week Zuma spoke of the imminent ­official launch of ­AEMFC, which until now had been housed in the ­Central ­Energy Fund.

It was given the green light by Cabinet in December to be a ­stand-alone ­company.Industry and legal experts were shocked this week when told of the scale of the corporation’s interests.

There has been concern over the waiver of many application ­conditions which ­AEMFC ­received in 2009 from former ­minerals and energy minister Buyelwa Sonjica, and which many said gave it an unfair advantage in the industry, but the scope of ­AEMFC interests and potential interests had not emerged until now.

“It’s huge,” said Dr Koos Pretorius, a leading mining commentator and director of the Federation for a Sustainable ­Environment.

The number of applications by AEMFC in Mpumalanga alone was equal to the total number of rights for ­Anglo American, he said.

Peter Leon, a leading mining-law ­expert from Webber Wentzel Attorneys, said Sonjica had acted beyond her legal power in waiving for the corporation the obligations required by an applicant for prospecting or ­mining rights.

Leon said AEMFC intended to mine large parts of eastern Free State, currently used for commercial farming, but that if commercial farmers there launched a ­legal challenge the corporation’s ­application exemptions would likely be ­overthrown in court.

Pretorius said it was incredible that an environmental impact plan could be drafted without ­consulting interested parties as there was no other way to ­establish the amount of water that would be used, where it would come from and the long-term effects on the land.

Late last year the corporation was due to open its first mine – a coal operation called Vlakfontein which previously belonged to ­Anglo American – near Ogies in Mpumalanga.

The opening was ­cancelled, however, after ­concerned ­environmentalists established that the mine did not have a valid water licence, ­Pretorius said.

Meanwhile, Leon said South ­Africa needed an independent body to govern the issuing of ­mineral rights. According to him, government could not be judge, player and ­supervisor.

Willem le Roux, a lawyer at Brink Cohen Le Roux, said AEMFC had ­created an ­extremely unhealthy situation where there was a clear conflict of interest.

Frans Barker, the senior ­executive ­director of the Chamber of Mines, said: “We are not ­necessarily opposed to a state ­mining company, but the playing field must be equal.”

He added that the ministerial ­exemption granted to the ­corporation was of deep concern to the chamber.The chamber had already ­undertaken a significant amount of research into the role of the state in mining and would make this body of research available.

This week the corporation’s CEO, Sizwe Madondo, did not ­respond to ­repeated attempts by City Press for an ­interview and/or comment.

The mineral resources ­department also did not respond to requests for ­comment on AEMFC’s applications, the type of minerals it was applying for and confirmation of the number of ­active and awarded prospecting and mining applications.

Private mining companies – ­including Anglo American – also declined to ­comment.

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