[miningmx.com] – SOUTH Africa’s mineral resources shadow minister, James Lorimer, said a third Chinese investment in the southern African country’s mines sector may fall by the wayside owing to government bungling.
“Next to go may be the Chinese Baosteel’s investment in the Aquila Steel South Africa manganese mining project in the Northern Cape which is still tangling with the DMR [Department of Mineral Resources] over five years after submitting it’s mining right application despite otherwise having been ready to commence operations years ago,” said Lorimer in a statement.
Lorimer was commenting after it emerged that plans by Eastern Platinum (Eastplats) to sell its South African assets for $225m in cash had failed owing to delays in approvals from the DMR.
“Chinese investors, Beijing Hehe Fengye Investments, were waiting only on approvals from the DMR to pour approximately R3.2bn into reviving the mothballed Crocodile River platinum mine,” said Lorimer.
“This massive investment could potentially have created thousands of job opportunities – an opportunity now lost,” he said.
Eastplats’ version of events is that there was a disagreement between Beijing Hehe Fengye Investment Company and the offeror for Eastplats’ mines, Hebei Zhongbo Platinum Company (HZP).
“The company understands that the shareholders of HZP are currently engaged in a process to resolve their differences,” said Ian Rozier, CEO and president of Eastplats.
“HZP has however advised the company that, until such resolution occurs, the transaction cannot proceed,” he said in a statement on Tuesday.
In October last year, Aquarius Platinum saw its efforts to sell platinum assets to a Chinese company for $37m foiled following DMR delays.
Aquarius’ proposal to sell the Blue Ridge and Sheba’s Ridge platinum prospects to a consortium lead by China National Arts & Crafts Corporation had been extended on nine occasions to allow for approvals before it eventually failed.
“Minister of Mineral Resources, Mosebenzi Zwane, who has been at his post for less than two months, needs to decide urgently if he will lead his department into simplifying the regulatory regime and efficient management of license applications or whether he will instead continue his predecessors’ legacy of stifling investment and decimating jobs in the sector,” said Lorimer.
In the case of Baosteel, it launched a bid in September to take then South African mines minister, Ngoako Ramatlhodi, to court after its appeal against a ministerial decision to set aside its mining and prospecting rights failed.
Ramathlodi had set aside Aquila’s Avontuur prospecting right in the Northern Cape and not to award Aquila a mining right for Gravenhage, a manganese project on which the firm had spent about R150m.
Aquila, Boasteel’s subsidiary company, appealed the decision but said in an announcement today that the process failed after some 20 months of deliberations. Aquila is, therefore, seeking a judicial review of the minister’s decisions in the Pretoria High Court.
“Regrettably, Aquila has now been left with no alternative but to commence legal proceedings seeking a judicial review of the minister’s decisions in order to protect its security of tenure,” the company said in an announcement.
