[miningmx.com] — A FORMER mining CEO enraged by the Nkwe Platinum/Bengwenyama controversy has told Miningmx that advising to disgruntled community leaders is a veritable cottage industry in the South African mining sector.
It’s no small irony, for instance, that a year ago Wesizwe Platinum shareholders were bracing themselves for the standoff between its then CEO, Mike Solomon, and Musa Capital which had won the trust of the Monnakgotla family, the traditional figurehead family of the Bakubung-Ba-Ratheo community.
It’s perhaps a warning to Nkwe Platinum minority shareholders that Wesizwe Platinum is yet to see a resolution regarding allegations Musa Capital siphoned the Bakubung’s shares without the agreement of the Bakubung’s true communal representatives.
The sympathetic advisors to the Bengwenyama through its investment vehicle, Bengwenyama Minerals, are none other than David Twist and Rudolph de Bruin, both seasoned financiers in the South African mining sector. Their names wouldn’t be disclosed by the Bengwenyama’s attorney, Eversheds, earlier this week, but it’s worth noting the track records of both men suggest they have more on their minds than just altruism.
De Bruin and Twist founded Sephaku Holdings in 2005 which subsequently listed on the JSE in August, 2009. More importantly, they were integral in the creation of Platmin, the company that nearly ran aground until a rescue package was negotiated with Brian Gilbertson’s Pallinghurst Resources.
Clearly, Twist and De Bruin recognise an opportunity to successfully advising the Bengwenyama. Other journalists have already pointed out that well advised community landholders could one day hope to mimic the Royal Bafokeng Holdings which has former Deutsche Bank employees Niall Carroll and Andrew Jackson at its helm. Taking a position early with a community, steering them through the legalities and negotiations of their well capitalised mining partners, makes for good business.
The problem is that the minerals resources department (DMR) is inclined to lend an ear to anybody claiming to be prejudiced by traditional capitalist endeavour. As a result, it’s quite possible for an individual to potentially stop the processing of a prospecting right.
For the predominantly white advisors, it’s just a question of backing the right horse. There’s nothing particularly wrong in this other than it highlights how vulnerable security of tenure is in the South African mining industry, and how it is potentially open to abuse.
THE KEBBLE LINK
Yet for surpise behind-the-scenes faces look no further than Nkwe Platinum and Genorah Resources. Peter Landau, Nkwe Platinum’s chairman, told Miningmx John Stratton, an alleged co-conspirator in the assassination of the Brett Kebble, was not a shareholder in Genorah and that Stratton only briefly owned a 0.2% in Nkwe Platinum.
He declined to mention, however, that he and Stratton go back some.
The two were fellow directors on Continential Goldfields, a mining holding company that along with Hendrik (Hennie) Buitendag, the former financial director of Western Areas, once invested in JCI, Western Areas and Randgold & Exploration. Stratton and Buitendag were subsequently co-accused in a $1bn lawsuit brought against PricewaterhouseCoopers for allegedly plundering $400m from JCI and Randgold & Exploration.
While Stratton and Buitendag left the board of Continental Goldfields, Landau stayed on, becoming the executive chairman of its reinvention: Continental Capital. It’s interesting that in addition to a 74% stake in the relatively newly established South African coal firm, Continental Coal, Continental Capital also has a related party transaction with Nkwe Platinum.
According to Nkwe Platinum’s full-year results end-June, it lent R6m (A$1m) to Continental Capital in return for five million options in Continental Capital and 10% per year in interest, currently around A$1.1m.
Quite why this was approved and to who’s benefit is unclear, but Continental Capital has a matrix of investments the full ambit of which is difficult to decipher for lack of a company website and organogram – unless our Google searching skills are deserting us. There’s also the question that Nkwe Platinum lent money in return for shares in an entity that seems to exist to anchor, or house, a range of other speculative interests.
In an announcement to the Australian Stock Exchange, Nkwe Platinum says it has lodged a fresh application with the DMR but this can’t be true either.
Applications for prospecting licenses have been suspended by the South African mines minister Susan Shabangu while her department sifts through hundreds of applications in pursuit of malfeasance. Only 100% community applications, such as the Bengwenyama’s, would be allowed.
