Eastern Platinum says this is nonsense and that it is legally compliant. From Moneyweb.
The Pakaneng community in Mpumalanga claims Eastern Platinum (Eastplat) is squatting on a mining right over its land, which has been in care and maintenance since 2012 – effectively sterilising its platinum group metal (PGM) deposit for more than a decade.
Even worse, it says the mining licence shown to the community legal advisor appears to have been altered after the fact to reflect a 20-year rather than a 12-year licence. Eastplat, listed on the JSE and the Toronto Stock Exchange (TSX), says nothing of the sort happened and that it is in possession of a valid 20-year mining right.
Read: Troubling whistleblower allegations and law suits hit Eastplats
The community has been waiting more than a decade for Eastplat to get on with the job of developing the site but to no avail.
The mining licence in question was issued on 1 September 2010 over portions of the farm Mareesburg in the district of Sekhukhune in Mpumalanga. The licence is held by Lion’s Head Platinum, majority owned by Eastplat.
Previous explorations on the 2 129 hectare farm by African Metals Corporation in the 1960s and Samancor in 1988 demonstrated the presence of chrome ore, cobalt, copper ore, gold, nickel, and PGMs. It’s a potentially rich deposit that the community believes could materially change the lives of the people in the area.
Something ‘didn’t look right’
Alan Sendzul leads the financing consortium that has formed a joint venture with the community. He looked into the provenance of the mining right as part of his due diligence.
“Something didn’t look right,” he tells Moneyweb. “I am very familiar with mining rights documents obtained under the Promotion of Access to Information Act (PAIA) and every page has to have a certified stamp from the Department of Mineral Resources and Energy (DMRE) saying ‘For information purposes only’, followed by the DMRE regional office.
“All the pages on the mining right copy received from the DMRE have this stamp, except page 6 where the stamp is missing. This is where the duration of the mining right is specified. It shows a 20 year mining right expiring on 30 August 2030, whereas all prior documents filed with the TSX clearly stated a 12 year mining right which expired in 2022. All other pages carry the DMRE stamp except this one.
“We are saying that the mining right has been altered and does not concur with the technical report data.”
The original technical report in 2010 clearly states a 12-year mining licence, renewable thereafter. Technical reports of this nature, especially when filed with the stock exchange, must be certified as true and accurate by a competent person, such as a mining engineer.
“The community applied for a mineral right over Mareesburg based on the contents of this report which appeared to show that it was expired, based on the technical report,” says Sendzul. “Under the previous management Eastplat raised more than $200 million for their Crocodile River and Mareesburg mining rights based on this technical report which was included as part of the prospectus in December 2010.”
12 or 20 years?
So, was the Mareesburg licence issued for 12 or 20 years?
Eastern Platinum says there was an error in the original technical report, which incorrectly stated the mining licence duration as 12 years. That has since been corrected to reflect a 20-year duration.
“Mr Sendzul and the community are aware of the correct date of the mining right. They have a copy of our mining right,” says Eastplat CEO Wanjin Yang in response to Moneyweb questions.
“We are in constant contact with the community, despite the fact that we were on care and maintenance, we will still meet them at least twice a year. Our SLP (Social and Labour Plan) projects for the mining right are in order.
“During the time we were conducting feasibility studies, we hired [a] few members of the community and procure[d] [a] TMM [trackless mobile machinery] tender from the community company in 2017.
“Mr Sendzul chose to rely on incompeted (sic) information from the website.”
Read: Mining prospecting rights being ‘sterilised’ by bureaucratic delays [May 2021]
If there was an amendment to the original mining licence, that should have been recorded as a ‘Material Change Report’ on the Toronto Stock Exchange. It appears this was not done.
Yang sent us a copy of the mining right, and while it is notarised, it does not have the DMRE stamps on any of the pages.
The community also disputes that Eastplat is in regular contact with it or that the SLP is in order, which is a requirement of the Mineral and Petroleum Resources Development Act (MPRDA). Nor has it received any benefits from the licence.
Read: Namaqualand communities call for moratorium on all new mining rights
We wrote to the DMRE for its response to Sendzul’s claims of irregularities in the issue of the mining licence and were told to put in a PAIA application.
We also wrote to the attorney who notarised the mining licence, Johan Moolman of Pratt Luyt & De Lange in Polokwane, to see if he had a record of it. If he had, this might clear up any confusion as to whether it was a 12- or 20-year mining right.
Moolman told us he was bound by confidentiality and was, therefore, unable to comment.
According to Sendzul, as the mining right approached expiry in 2022, Eastplat unilaterally changed the requisite filing on the TSX to reflect a 20-year right.
Bring in the blockchain
If ever there was a case for storing information on a public blockchain, this is it.
It would remove any possibility of contesting the authenticity of mining rights and other key documents. A blockchain recordal system, such as that used by bitcoin, cannot be altered after the fact because it is distributed on thousands of computers (or nodes) and has proven itself unhackable.
Cases such as this lend weight to those calling for hosting mining rights on a public database, open to inspection by anyone (as is the bitcoin blockchain), since it is taxpayer-funded.
Instead, we are told to submit a PAIA request to get access to the information we require, as if this is a state secret.
New cadastral system
The DMRE is currently implementing a new mining cadastral system, due to go live in 2025, that should speed up applications for mining rights and improve transparency.
One of the main reasons for doing this is to attract investment into exploration, a precursor to mine development. SA’s share of global exploration has fallen from around 5% two decades ago to less than 1%. The DMRE hopes to reverse this.
Community appeals DMRE’s rejection of prospecting licence
The DMRE says the current Lion’s Head mining licence is valid and has rejected the community’s application for a prospecting licence over the farm Mareesburg.
That rejection is being appealed by the community, which has made a land claim for the farm in question but has not as yet received restitution. That, however, is not an impediment in terms of the MPRDA, according to senior counsel for the community.
A crucial part of the appeal is the assertion that the Eastplat licence expired in August 2022, as reflected in the technical report.
Even if the licence was renewed, the community says it has a right to be consulted over issues concerning its land, adding that it was not consulted when the licence was first granted in 2010.
