PATRICE Motsepe’s Johannesburg-listed financial services company, African Rainbow Capital (ARC), was confident commercial production at its 26%-owned Kropz, which owns the Elandsfontein phosphate mine, would begin once objections regarding the issue of a water licence had been aired.
On October 13, the West Coast Environmental Protection Agency (WCEPA) filed an urgent interdict in the Western Cape High Court against Kropz and the Minister and Department of Water Affairs and Sanitation. The NGO argued that Kropz should stop dewatering the Langebaan Lagoon in South Africa’s Western Cape province because it had successfully appealed the grant of a water use licence (WUL).
The Elandsfontein mine is situated next to the Langebaan lagoon. The company reckons it has jumped every possible hurdle in ensuring the region is protected from environmental pollution, but non-governmental organisations have not been convinced. They want the mine to be suspended indefinitely.
The interdict was the latest setback for Kropz which on August 15 said it had put the 1.5 million tonnes/year phosphate operation on hold owing to a combination of regulatory, market and technical problems.
“Kropz, the phosphate mine in which we have a 26% interest, has recently received negative publicity in the press, specifically about its Water Use License and the fact that the mining and the commissioning of the processing plant have been delayed,” said ARC in an investment update today.
“We remain very close to developments and are of the view that the issues will be resolved,” it added. Kropz said in October that suspending operations at Elandsfontein would eventually be detrimental to the environment.
“If over time we are not be able to continue to safely pump the water out of the Elandsfontein aquifer around our open pit and allow it to filter back into the aquifer in accordance with our dewatering system design, the pit will flood.” said Michelle Lawrence, technical director for Kropz in a statement.
“If dewatering stops for an extended period, the pit will increase in size due to erosion of its sidewalls by the water; the volume of water in the pit will increase significantly; and the water quality will deteriorate, negatively impacting groundwater,” Lawrence added.
Motsepe is the owner of African Rainbow Minerals, one of South Africa’s most high profile and successful empowerment groupings. He founded ARC as a next phase development of grassroots empowerment in which funds from his Ubuntu-Botho Investments in partnership with Sanlam is diverted into additional on the ground development.
As a result, ARC is generally speaking, a non-mining investment vehicle although it has dedicated a sum of R93m to the Last Mile Fund, a private equity company led by Bernard Swanepoel, the former CEO of Harmony Gold in which ARM has a 14% stake.
Commenting on the Last Mile Fund, ARC said it would focus on “… unique investment opportunities in the mining sector where such investment will have asymmetric potential upside compared to the risk profile as it has been made as the ‘capital provider of last resort’. On October 2, the fund announced it had bought Coal of Africa’s Mooiplaats thermal coal mine in Mpumalanga province for R180m.