Xstrata refutes Mandela link

Miningmx reporter | Mon, 15 Nov 2010 18:13

[miningmx.com] -- GLOBAL resources group Xstrata on Monday said it took exception to insinuations of improper conduct on its part in the sale of its former Maloma operations to the ANC’s investment vehicle Chancellor House.

This followed a report in the Sunday Times, also summarised in Miningmx, which stated that Nelson Mandela’s son-in-law Isaac Kwame Amuah was central in a consortium involving Chancellor House in the purchase of the Swaziland mine from Xstrata Alloys in a R500m deal.

According to the report, Xstrata Alloys sold its 75% shareholding in Maloma – the value of which was estimated at R500m in transaction papers – for only R25m in a deal that would see the consortium taking over the mine’s debt and rehabilitation costs.

Xstrata spokesperson Songezo Zibi said the suggestion of a R500m deal was entirely fictitious.

“This is a serious issue to us,” said Zibi. “If we sold an asset that was worth R500m for only R25m, we would have shortchanged our investors.”

He said the transaction with Chancellor House followed an open tender process after Xstrata put the mine up for sale. Chancellor House was awarded the mine in April after it made the highest bid. Zibi also denied that Amuah took part in the negotiations or subsequent deal.

Zibi also rebuffed claims that the proceeds of the mine were destined for Eskom’s power stations.

“Maloma mine does not produce thermal coal that is used for power stations, but anthracite which is used in the smelting and refining processes,” Zibi said.

“Power stations such as those belonging to Eskom do not use anthracite, and therefore the inference drawn in the story that the sale could somehow be linked to a potential Eskom coal supply contract is without foundation.”

Zibi said Xstrata disposed of the mine, as the group managed to secure the supply of anthracite from other sources.