MC Mining’s Makhado project at centre of Limpopo land bust-up

David Brown, CEO, MC Mining

The farms belonging to Akkerland Boerdery – the Limpopo game farm at the centre of the confrontation over  “land expropriation without compensation”  – are the ones on which MC Mining wants to develop its Makhado coking coal mine.

MC Mining (formerly Coal of Africa) CEO David Brown confirmed this but told Miningmx  his company was not involved in the dispute which was between the landowner and government.

Brown commented, “we hold the mining right to these farms and are following a separate process to gain access in terms of the provisions of the Minerals and Petroleum Resources Development Act (MPRDA).   We have approached the landowner during the last six weeks in order to start a discussion to gain access.”

In April this year  MC Mining reported that it had all the regulatory permits in place to start the Makhado mine but  could not begin  construction because of the land claim underway on the farms Lukin and Salaita.

At that time Brown said the situation was not likely to delay the development of Makhado because MC Mining still had to finalise the funding for the project as well as the marketing arrangements.

The owner of Akkerland Boerdery – Johan Steenkamp – has stirred up intense foreign media coverage over the land dispute which, according to an article in the UK Daily Mail, he described as  “theft”.

According to the Daily Mail article,  Steenkamp said the government’s redistribution plans were just a cover so that the government could get its hands on the valuable coal deposits found under his farm land.

But, in terms of the MPRDA which came into effect in 2005 , government already owns that coal because the Act gave it ownership of all South Africa’s minerals for which mining companies could then apply for the rights to explore and mine.

Steenkamp claims his property – covering some 3,300ha –  is worth some R200m as “true value”  but that the government was only offering R20m to buy it.

The furore over the dispute has even reached the White House with President Donald Trump “tweeting” about the land expropriation situation in South Africa resulting in diplomatic interactions between the SA and US governments.

Brown commented it was immaterial to MC Mining whether the farms were owned by the current holders or by the community which has brought the land claim.

“We will have a discussion on access with whoever the owner of the land is at that time and compensation for that access has to be based on a fair and equitable market value.   People must draw their own conclusions on what a fair value is for those farms.”

Makhado hosts a 172.7mt reserve from which it is estimated 2.3mt/year of hard coking coal and 3.2mt/year of thermal coal can be mined over a 16 year life-of-mine.

This is MC Mining’s second attempt to develop a colliery in Limpopo with the first being the troubled Vele operation which ran into huge opposition from environmentalists because of its close proximity to the Mapungubwe National Park which is a UNESCO world heritage site.

The environmental lobby  managed to shut the mine down for a year prior to Brown’s appointment as CEO of the company.  He subsequently put Vele on care and maintenance in October 2013 pending a major technical review of the mine.

In April this year Brown told Miningmx  a “final decision” on the mine’s future had not been made but several options were being looked at, one of which was disposal.

 

 

2 COMMENTS

  1. Its not as simple as the current owner or the mining right holder portray. Everything is stacked against the entitled community. First, the MPRDA gives them little or no say in the operations.
    This usually goes to a BEE whom the mining co partners with.
    Choice depends on how much pull they have within the system. Communities have non or very little. So effectively the BEE squats on the land pretending to be an HDSA.
    Land claims are bed with mining co’s. A little fiscal lubrication goes a long way in delaying registration of property to the land occupiers or community since they have to prove effective ownership through descendents etc.
    Consultations are done as a formality without actual participation and downstream rights for AP’s and IP’s. Besides if mining co’s dont comply at a later stage once construction starts……who is really checking.
    Until sustainability is reached – and this required serious amendments to the use of CPA’s where regional administrative still control proceeds from any communal revenues flowing from mining – there will be instability and threats to operations.
    Expect more legal challenges on the ground and environmental lobbying all of which will jeopardise and make SA mining investor unfriendly.
    Brown should really be setting an example beyond that of mining steretypes.

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