ANC-regime untrustworthy in business deals
28 January 2011 1 Comment
The Sishen Iron Ore Company (SIOC-Kumba) was told in a rude letter from Mineral Resources Department official Sandile Nogxina that their application to take over the iron-ore mining operation from ArcelorMittal company at the huge Sishen iron-ore mine, was ‘fraudulent’, and submitted in a ‘premature, irregular, misleading manner’.
SIOC’s application for the mining rights of Sishen – which they were already mining – was rudely rejected before the North Gauteng High Court had even been able to rule on the company’s urgent application for a review on 21 May 2010, asking for a legal ruling against the government’s shock decision on 30 Nov 2009 to hand over Mittal’s prospecting rights to the ANC-linked Imperial Crown Trading 289 instead.
- Note to foreign investors: To summarise, this case once again highlights the fact that the South African government cannot be trusted with business deals – especially if they simply hand over the mining rights to relatives and politcal-partners of President Jacob Zuma before a law court could even decide the legality surrounding this issue.
Step 1: register a company for R500.
Step 2: become pals with the peeps at the Dept of mineral resources;
Step 3: if a big mining company applies for mining rights, apply for the same rights.
Step 4: get mining rights, do nothing, collect millions…
Kumba shareholders were previously advised that because ArcelorMittal South Africa Limited (“Mittal”) had failed to convert its former old order mining right as to a 21.4% undivided share in the Sishen Mine, it had lapsed. Accordingly, Sishen Iron Ore Company (Proprietary) Limited (“SIOC”), which mines the Sishen Mine, had itself applied for a mining right for these 21.4% undivided rights in respect of the Sishen Mine.
- However, the Department of Mineral Resources DMR had in the meantime, already granted a prospecting right on 30 November 2009 to Imperial Crown Trading 289 (Proprietary) Limited (“ICT”) for the residual undivided 21.4% of the Sishen Mine. In response, Sishen Iron Ore Company launched a review application in the North Gauteng High Court on 21 May 2010 against the government’s decision to launch the prospecting rights to Imperial Crown, and the government’s failure to even consider their own decision.
The government and Imperial Crown Trading had not even filed their answering affidavits in the law suit when Kumba’s CEO received the following letter from Sandile Nogxina of the Department of Mineral Resources:
- 14 January 2011 Statement issued by Kumba Iron Ore Ltd through the JSE’s SENS Service, January 14 2011 http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page72308?oid=217500&sn=Detail&pid=72308