SA springs surprise reverse on Aquila claim

[miningmx.com] – IN an unusual turn of events, South Africa’s mineral resources department (DMR) has suspended a prospecting right over a manganese prospect lodged by a government-owned company in favour of facilitating an internal hearing that will listen to the claim of Aquila Resources’ over the deposit.

Aquila Resources is an Australian-listed company that was hoping to mine the Gravenhage manganese deposit. It lodged an application for a mining right, which was accepted by the DMR, but was later informed that a prospecting licence had been awarded over a portion of the deposit to another company, Pan African Mineral Development Company (PAMDC), an entity owned by the governments of South Africa, Zimbabwe and Zambia.

Aquila Resources said that it was prepared to take the matter to court, but the DMR has since suspended PAMDC’s prospecting right while it holds discussions that could see Aquila’s mining right awarded.

“It has been extraordinary,’ a market source told Miningmx. “I don’t know what’s come over it [the DMR]. Whether this was the bad publicity, or government doesn’t want to take this to court.’

The DMR had not responded to messages at the time of publication, but Miningmx will update the article if and when government makes comment.

The procedure now is that director-general of the DMR, Thibedi Ramontja, will facilitate a hearing. There was no indication of how it might turn out, but an independent appeal will be heard, sources said. A decision is expected mid-January.

One issue around the hearing that has to be cleared up is the eventual role played by Ramontja who is a former director of PAMDC.

Gravenhage is a 147.8 million tonne (mt) manganese deposit situated in South Africa’s Northern province. Aquila was considering investing up to $480m in South Africa of which $180m would be on the proposed 1.5 million tonne/year (mtpa) Avontuur manganese mine of which the Gravenhage deposit is a part.

Aquila said a further $215m to $300m is being proposed for investment on Thabazimbi, an iron ore prospect containing an estimated 37.1mt in measured resources. Some R450m has been invested in exploration activities by Aquila Resources since 2006.

Speaking to Australian investors in August, South African mines minister, Susan Shabangu, said: “. the table has been laid in South Africa . and what is left is for our Australian friends to take their rightful place in African development’.

Conflicts over the right to mine mineral deposits has been a characteristic of South Africa’s mineral development industry since the promulgation of the Minerals & Petroleum Resources Development Act (MPRDA) in 2004.

The high profile, three-way clash of interests involving Kumba Iron Ore, ArcelorMittal SA and Imperial Crown Trading (ICT) is the most famous example.

The award of rights to market some of the by-product minerals from one of Lonmin’s platinum mines to former director-general, Sivi Gounden’s HolGoun Group in 2011 was another, a conflict resolved a year later after HolGoun Group was paid $4m by Lonmin for the rights.

In both cases, it was suspected the interloper had political means. In the case of PAMDC, however, it clearly is the government: three goverments in fact.

PAMDC was formerly the National Railways of Zimbabwe (ZIZA) and before 1980, Rhodesia Railways. In the colonial era, ZIZA operated rail routes through southern and northern Rhodesia or Zimbabwe and Zambia respectively. That’s why ZIZA’s shareholders consist today of these southern Africa governments.

PAMDC was created in 2007 as a new joint venture company aimed at taking over the diamondiferous concessions in South Africa. At the time, the Zimbabwean government appointed two of its cabinet members to PAMDC’s board, and there were even plans to list it on the JSE.