[miningmx.com] — COAL of Africa (CoAL) CEO John Wallington said greater clarity and certainty were required over regulatory processes in South Africa for confidence to be restored in the country as a mining investment destination.
Speaking at a presentation of CoAL’s September quarter results in Johannesburg on Thursday, Wallington said it had become clear South Africa was considered a “high risk destination’ at present by London investment circles.
“There’s a lot of uncertainty about where South Africa is going as a country,’ he said.
Wallington added he would also like to see “sensitive areas’ – where mining may not be allowed – to be more clearly demarcated, given that the development of ecotourism was a significant aspect of government planning.
He said: “Exploration expenditure should be confined to areas that can be mined. It is immoral to allow a company to invest millions on exploration with no intention of allowing it to mine in that area.’
In August, CoAL was forced to stop production from its Vele coking coal mine in Limpopo Province by the department of environmental affairs (DEA).
The mine has remained closed while CoAL works with the DEA and the department of water affairs to meet their requirements that will allow the resumption of mining.
But CoAL has also run into fierce opposition to Vele from a coalition of non-governmental organisations (NGOs). These include the Peace Parks Foundation, the World Wide Fund for Nature SA and the Endangered Wildlife Trust (EWT), which have brought their own legal action against the company.
The NGOs view Vele as the “thin edge of the wedge’ leading to far more extensive mining development of the region.
They want the mine closed permanently because the region has been earmarked to become a major ecotourist destination through development of the trans-frontier conservation area (TFCA) centred on the Mapungubwe National Park.
EWT CEO Yolan Friedmann said: “It’s time we understood in SA that development at all costs has a huge cost and some areas are simply not appropriate for any form of development.’
Asked whether he thought the NGOs could succeed in their efforts to shut the mine down completely, Wallington replied: “I don’t know’.
He said a great deal of of misinformation had been spread about the alleged impact of Vele on the Mapungubwe National Park.
“We are situated east of the park and outside the buffer zone. Nobody will able to hear or see us when we are operating.’
Wallington added that other coal mine developments being looked at for the region were actually located inside the broader, proposed TFCA.
“I do not see how those developments would be able to comply with the environmental requirements that we are now meeting. They will impact on the national park.’
Wallington did not name the other projects but, so far, two other potential coal mining developments in the region have been identified.
One, controlled by Anglo American, sits immediately south of Mapungubwe. The other, controlled by Australian junior Universal Coal, sits west of Mapungubwe covering a number of private game farms which want to be included in the TFCA.
So far, CoAL has spent nearly R600m on the development of Vele.
Asked whether the company would sue the South African government if the mine was not allowed back into production, Wallington replied: “I hope it does not come to that.’
CoAL chairperson Richard Linnell said: “We have a fiduciary responsibility to our shareholders so we may have no option, but that’s not a choice we would want to make.’
Wallington acknowledged that CoAL had made a number of mistakes at Vele, which he put down to the speed of development and a lack of specific skills in the company during its initial asset acquisition and growth phase.
He said the lessons learnt at Vele would be applied in the development of CoAL’s Makhado coking coal project, located in Limpopo Province near the Soutpansberg mountain range.
“We have the opportunity to get this development right, and we will make sure we do not fall into the same traps that we did at Vele.
“I have already approached the NGOs opposing Vele to join the company in the development of Makhado because we need an optimal balance between environmental and socioeconomic needs,’ Wallington said.
