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Julius Malema linked to R250m mine deal

Miningmx reporter | Sun, 14 Mar 2010 10:02

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[miningmx.com] -- THE most vocal proponent of the nationalisation of South Africa's mines, the leader of the ruling party's youth wing, Julius Malema, is linked to a R250m mining deal that involves politically connected individuals at the expense of impoverished communities, the country's Sunday Times reported.

The company at the heart of the deal is ASA Metals, which is 60% owned by Sinosteel subsidiary Eastern Asia Metals Investment Co Ltd from China and the rest is held by Limpopo Economic Development Enterprise (Limdev) of South Africa. ASA Metals owns a chromite mine and smelter near Steelpoort on the platinum-rich Eastern Busveld Igneous Complex.

The Sunday Times said it had information showing those involved in the deal include soccer boss Irvin Khoza and Kgomotso Motlanthe, the son of deputy president Kgalema Motlanthe. Limdev will retain 10% of ASA once the deal is done.

Malema was also a founding director in a consortium that was registered for the bid, shortly after discussions about the broad-based black economic empowerment (BEE) deal started in 2006. He was later forced out, the Sunday Times said.

But the Sunday Times said it understood he had since held several informal meetings with those involved in putting the deal together.

Malema first publicly raised the issue of the nationalisation of mines at a Black Management Forum meeting on October 9 last year - about a week before ASA Metals and the Limdev were scheduled to announce the successful bidder, the newspaper said.

Sinosteel denied speculation that it was being pressured into selling out of its 60% stake in ASA Metals. Sinosteel is to invest R3bn in the project, increasing it value 800 times, Suwei Zhang, chief executive of ASA Metals told the newspaper.

An official announcement on the sale of 30% of ASA Metals, from Limdev's stake, is expected in three weeks, Sunday Times reported, adding it had been established that five consortiums and companies - from an initial short list of 43 - have been earmarked after being interviewed by the Limdev board a month ago.

The five will each get a 12.5% stake of the shares being sold. The stake had been earmarked for impoverished communities living near the mine, but the Sunday Times reported there had been political infighting and intimidation by politicians.

A number of politicians within the Limpopo ANC structures suggested Malema's increasingly strident calls for nationalisation were designed to deflected attention away from the ASA transaction.

One of the short-listed bidders, who declined to be named for fear of reprisals, told the newspaper the entire transaction was "rotten".

"You will be shocked to find out who else is involved (in this deal) ... I'm terrified just talking to you. I'm not only risking the deal but also putting my life at risk. These people mean business and are not prepared to lose this deal at whatever cost," the source was quoted as saying.

He alleged that Khoza had used his political connections to "steal" a stake in the deal.

"(A)nd there are other politicians and their families involved, who have either signed up in their own personal capacity or used proxies," he said, describing the deal as "a joke".

The Sunday Times has established that the short-listed consortiums include Tunache Investment, led by Khoza and serial empowerment dealmaker Ronnie Ntuli; Rebone Mining Consortium; Kalapeng Mining Resources; Moribo Resources; and Dilokong Consortium. Buena Vista Trading, led by Kgomotso Isaac Motlanthe, features in one of the consortiums.

Malema this week refused to speak to the Sunday Times. The youth league's spokesman, Floyd Shivambu, on Friday denied claims that Malema was benefiting, either directly or indirectly, from the deal or that he had lobbied on behalf of interested parties.

Limdev's transaction advisers, SizweNtsaluba VSP, declined to discuss the deal or explain why the announcement of the successful bidders had been postponed twice.

Limdev spokesman Leo Gama said he could not comment. "Once it is completed, our organisation will announce the winning companies and the public will know," he told the newspaper.



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