The Department of Mineral Resources has weighed in on the ongoing spat over the control of Wesizwe Platinum after a major Chinese investor in the aspiring platinum miner instituted a purge of Wesizwe’s South African executives.
Early this week, the department summoned Wesizwe executives and Jinchuan Group’s representatives to its headquarters in Pretoria to get to the bottom of the management shake-up in the platinum company that resulted in chief executive Arthur Mashiatshidi and chief financial officer Jacques de Wet being replaced by Chinese nationals.
Jinchuan is part of a Chinese consortium that earlier this year invested $877 million (about R6 billion) in Wesizwe, which is building a mine near Sun City in the North West province.
The investment gave Jinchuan, China’s biggest nickel and cobalt producer, and its partners a 45% stake in Wesizwe, which it then used to take control of the company and its board.
The department intervened after Wesizwe executives complained that the move by the Chinese could compromise employment equity and the country’s transformation objectives, which were spelt out in the Mineral and Petroleum Resources Development Act.
Mining companies that complied with the act were granted mining rights and licences by the department.
The department’s spokesperson Zingaphi Jakuja said Wesizwe and Jinchuan were told that it supported their deal on the understanding that the companies adhered to the conditions for the licence.
“The meeting resulted in consensus that all issues relating to change of ownership, representation and operations of Wesizwe Platinum shall not be in transgression with the right granting criteria and conditions attached to the right.
“A letter tabulating all the areas of concern and what action is needed to address these has been forwarded to the respective companies,” said Jakuja.
Some Wesizwe executives saw red after Jianke Gao, an appointee from Jinchuan, was appointed chief executive of the company, ousting Mashiatshidi from the job.
Gao would take over the reins once he secured a work permit. In the meantime, Mashiatshidi was made joint chief executive of Wesizwe alongside another Chinese executive, Qiyin Zhang. De Wet made way for Wenliang Ma as chief financial officer.
The Chinese also appointed Dixin Chen as Wesizwe deputy chairperson, a position that never existed before.
The management changes at Wesizwe raised concerns at the South African Mining Development Association, the mouthpiece for black-owned mining companies and junior exploration firms.
The association’s acting chairperson Willy Leeuw warned that the Wesizwe developments could have a negative effect on the company’s transformation objectives.
“This removal of local executives is contrary to the spirit of the mining charter and the transformation of the mining industry. It is absolutely not what is envisaged in the act. The mineral resources department, which regulates the mining industry, needs to deal with the matter,” Leeuw said.
Mashiatshidi, who looked set to quit the company once Gao got his work permit, said it was inevitable that management reshuffling would occur with change of control at shareholder level.