Mines top brass in coal row

Brendan Ryan | Wed, 03 Mar 2010 16:33

[miningmx.com] -- CHAMBER of Mines president Sipho Nkosi is indirectly involved in a dispute with chamber CEO Mzolisi Diliza over a coal property in the Delmas area.

The wrangle results from a dispute between a mining investment company controlled by Diliza called Target Holdings, and coal heavyweight Exxaro Resources of which Nkosi is the CEO.

Exxaro is a member of the chamber, whose function is to represent the interests of the South African mining industry. Nkosi is in his second term as president of the chamber.

Also involved in a dispute with Target in the Delmas area is Keaton Energy.

Keaton CEO Paul Miller said: “We are involved in difficult commercial negotiations to obtain properties from farmers near Delmas.

“A company called Target Holdings has been acting for the farmers. We were surprised to see that the CEO of the Chamber of Mines is a director of the company and, presumably, a shareholder as well.”

Diliza’s partner in Target – Jan Brits, who has been directly involved in advising the farmers – confirmed to Miningmx that Diliza owns 51% of Target.

Brits commented, “As to my partner’s involvement in the company I would like to put it on record that he is a shareholder but the day-to-day management of the company is my responsibility.”

Diliza is in the UK accompanying President Jacob Zuma on his state visit and could not be reached.

Exxaro spokesman Hilton Atkinson told Miningmx: “Exxaro is in negotiations with a farmer over the purchase of land to expand the Leeupan colliery. We cannot comment any further because this process is ongoing.”

Brits said: “Leeupan is in ongoing negotiations with Schoeman Boerderye. They want to buy another 300 hectares of land.

Mining sources reckon the farmers are trying to negotiate higher prices for their ground, based on the value of the underlying coal to the mining company.

They say the farmers are not entitled to do that as in terms of new mining legislation they do not own the mineral rights, which now belong to the state.

“If they wanted to mine the coal themselves they should have applied for prospecting licences and mining rights,” said a coal company executive.

Brits said: “We are not stirring or trying to milk the mining companies. We are only trying to make sure the farmers receive what their land is worth.

“The Delmas area is one of the best maize-producing regions in the country. These are not Mickey Mouse operations.

“The farmers who do well are seasoned businessmen and a previous conception that a mining company can ride roughshod over a guy operating from his Isuzu bakkie is not on the cards anymore.”

“I am in the mining game and I am also a farmer. We brought in Professor Andre Louw from the University of Pretoria to value the ground that Exxaro wants to buy.

“Your information about me being in dispute with various mining companies on behalf of land owners is not correct.

“Mr van der Merwe (an attorney) and I have been involved in a number of negotiations during the last two years with various mining companies and all negotiations have been concluded to the satisfaction of all parties.”

Brits said Keaton made verbal offers to three landowners about a year ago buy their land.

“This offer was not accepted and Keaton requested that we provide them with a counter proposal which we did. Some months later, on April 3, 2009 we received notification that Keaton had withdrawn the offers.

“We therefore notified the Department of Minerals that in terms of Section 54 the land owners declared a dispute."

Brits said Keaton had notified landowners on January 22 this year that they would start construction of a washing plant on their properties on February 5.

“They also informed the land owners that they will commence with mining some two months after starting with the construction. In this letter Keaton did not offer to purchase the land but to pay compensation for any loss or damage suffered.

“Our attorney then informed Keaton that access will not be allowed for any construction until such time as compensation has been agreed on.”

Miller said: “We have taken very clear legal advice. As an authorised mining right holder,we have the right to enter the property and to mine.

“Obviously, as a responsible mining operator we want to negotiate acceptable commercial terms with the farmer and this is always a difficult process.

“We are not a member of the Chamber of Mines but we have to wonder what the CEO of the Chamber is doing involved in a company like Target which holds prospecting rights.

“Target could be considered a competitor and could also be viewed as acting against the interests of mining companies in what is a difficult situation.”