AngloPlat still out in the cold

[] — ANGLO Platinum (AngloPlat) has not yet converted any old order mining rights, despite claims by Anglo American CEO Cynthia Carroll more than two years ago that the group had been awarded conversion of all its rights bar two joint ventures.

The situation has been causing concern in investment circles for months. It has not been helped by comments made by Minister of Mineral Resources Susan Shabangu on Wednesday during the signing of the joint mining declaration by the government, the unions and the mining industry.

That’s despite generally favourable reaction to the declaration.

Mining law expert Peter Leon – a partner in legal firm Webber Wentzel – said the declaration was “a very positive step forward’, but pointed out the “issue of vagueness’ in the legislation had not yet been addressed.

On April 29 2008 Carroll announced at a joint conference held with then minister of Minerals and Energy Buyelwa Sonjica that conversion had been granted for all Anglo’s coal, ferrous metals and base metals operations as well as the bulk of its platinum business.

The platinum operations which had not been granted conversion were the Modikwa mine – a 50/50 joint venture with African Rainbow Minerals – and the Bafokeng Rasimone mine, which at that stage was a 50/50 JV with Royal Bafokeng Resources.

According to Jacinto Rocha, then deputy director general in the Department of Minerals and Energy, there were no outstanding issues to be resolved and the problem was a “technical one’, involving submission of applications from both JV partners.

But AngloPlat investor relations executive Anna Mulholland told Miningmx on Friday that AngloPlat had received “unconditional conversion letters from the Department of Mineral Resources (DMR) for Amandelbult and Mogalakwena’.

Said Mulholland : “For our other operations, we received conditional letters – conditional upon resubmitting our social and labour plans which we are in the process of finalising with the DMR.’

The bottom-line then is that nothing has changed since AngloPlat CEO Neville Nicolau told Miningmx on April 14 this year that none of the group’s conversions had actually been granted.

According to Leon, a “conversion letter’ is significant because it means the DMR has agreed to convert the right.

But it does not mean that the new order right has actually been granted and, once granted, the right has to be legally executed before everything is nailed down.

Nicolau said in April: “The continuing delay appears to be administrative, and you have to remember that the deal with Anooraq over Lebowa was delayed and only became effective in July last year.’

But this is still more than two years after Rocha declared there were only “technical problems’ outstanding.

Rocha has since left the DMR, although he was present at Wednesday’s signing ceremony in Pretoria and still apparently consults to government.

DMR director general Sandile Nogxina is overseas and could not be reached for comment.

The concern voiced by some platinum industry sources is that AngloPlat may still be under pressure from government to do further black economic empowerment (BEE) deals, despite having carried out three major transactions.

Those transactions have set up Northam Platinum as an independent platinum producer owning the Booysendal deposit, while Anooraq Resources and Royal Bafokeng Platinum have been established as major players in partnership with AngloPlat.

In April, Nicolau denied speculation that his group was being pressured politically for more concessions.

He said: “We have done enough to secure conversion, and are not being pressured to do more.’

Comments made by Shabangu on Wednesday to the effect that she rejected the concept of “once empowered always empowered’ and that mining companies should always have an empowerment partner are worrying.

AngloPlat does not actually have an empowerment partner, because it went the route of winning empowerment credits through giving up “units of production’ rather than bringing a BEE partner into the business.

Leon points out that was provided for in the Mining Charter and the Mineral and Petroleum Resources Development Act (MPRDA) as an alternative to selling equity in the business.

He said: “I don’t know the basis for the minister’s comments, because I don’t think there’s anything in the mining charter or the joint declaration that would require a mining company to empower itself again.

“I think such a requirement would be unfair, but the problem is that the issue of vagueness in the legislation has not been addressed. It’s essential to have these things spelt out.’

Leon praised Shabangu for her efforts, positive approach and concern to improve South Africa’s reputation as a mining destination.

He said her intention of achieving marked improvements in the country’s ranking in terms of Canada’s Fraser Institute survey was “very significant’.

He said: “I think she is making a real effort to change things. My sense is that she really wants to make a difference.

“The section of the declaration covering South Africa’s regulatory framework is far reaching, because government has committed to review substantially the MPRDA to make it more investor friendly.’