Blood on the floor: Startling allegations from Xolobeni

21 Jul 2016

By: PBM

There is no end in sight in the life taking fracas that has engulfed the Xolobeni community even with the announcement that the Australia’s Mineral Commodities (MRC) is exiting the Xolobeni Min­eral Sands Project.

It could be that the blood of Sikhosiphi ‘Bazooka’ Radebe, the chairman of the Amadiba Crisis Committee (ACC), who was killed early this year is crying out against the mining concern that has exposed the of shenanigans associated with mining affected communities.

A statement issued by the Legal Resources Cen­tre (LRC) and Richard Spoor Inc makes startling allegations including a suggestion that the MRC sale is a smokescreen. Here follows the statement:

The Legal Resources Cen­tre (LRC) and Richard Spoor Inc , Attor­neys (Spoor Inc) wel­come the deci­sion of Min­eral Com­modi­ties Ltd (MRC) to divest from the Xolobeni Min­eral Sands Project; announced on the Aus­tralian Secu­ri­ties Exchange today.

The LRC and Spoor Inc rep­re­sent the Amadiba Cri­sis Com­mit­tee, the cus­tom­ary lead­er­ship of the Umgun­gundlovu com­mu­nity, and69 of the 75 house­holds within the pro­posed area in oppos­ing the min­ing right appli­ca­tion filed in March 2015.

The community’s objec­tion to the min­ing right appli­ca­tion high­lighted var­i­ous defects in MRC’s min­ing right appli­ca­tion.

Fun­da­men­tally, the objec­tion noted that MRC had failed to seek the con­sent of the com­mu­nity in terms of its cus­tom­ary law, and that no min­ing right appli­ca­tion should be granted with­out such con­sent being given.

Despite the community’s oppo­si­tion to the Xolobeni project, MRC has been granted repeated exten­sions by the Depart­ment of Min­eral Resources to file cru­cial envi­ron­men­tal doc­u­ments, with­out any ref­er­ence to the com­mu­nity, when its appli­ca­tion stood to be dis­missed out­right.

Con­cern regard­ing trans­ac­tion with Keysha

We note with con­cern MRC’s announce­ment that it has entered into a Mem­o­ran­dum of Under­stand­ing with Keysha Invest­ments178 Pty Ltd (Keysha) to divest its inter­est in Transworld Energy and Resources (SA) Pty Ltd (TEM) in the Xolobeni Project.

We note that the Xolobeni com­mu­nity is only learn­ing of this deci­sion from an announce­ment on the Aus­tralian Secu­ri­ties Exchange, and were not con­sulted about the deci­sion. It is unclear whether the Depart­ment of Min­eral Resources has played a role in facil­i­tat­ing this trans­ac­tion, or if any pub­lic financ­ing through the Indus­trial Devel­op­ment Cor­po­ra­tion or any other entity is involved.

It is man­i­festly unclear how this trans­ac­tion will be funded, and what com­pen­sa­tion Keysha will be obliged to pay to MRC and/or its sub­sidiaries in return for MRC’s inter­est in the Xolobeni project.

We stren­u­ously object to the process, in terms of which this deci­sion has been taken with­out our clients’ par­tic­i­pa­tion, much less con­sent. We have accord­ingly writ­ten to MRC and its attor­neys seek­ing a copy of the MoU on behalf of our clients.

We note that pre­vi­ous doc­u­ments filed by MRC’s sub­sidiary, TEM, have indi­cated that Keysha was set up by MRC as a wholly owned sub­sidiary of the Xolobeni Empow­er­ment Com­pany (XolCo), a struc­ture estab­lished by MRC.

While XolCo has been described by MRC as a “Black Eco­nomic Empow­er­ment (BEE) com­pany rep­re­sent­ing the Amadiba com­mu­nity at Xolobeni”, our clients have never been con­sulted regard­ing XolCo and deny that it rep­re­sents them:

  • MRCdoc­u­ments have var­i­ously asserted that XolCo is owned by five or nine com­mu­nity trusts. The com­mu­nity has not been con­sulted in any of these trusts’ for­ma­tion and does not know whether any or all of these trusts have been reg­is­tered.
  • We have seen one trust deed from these com­mu­nity trusts. In terms of this deed the munic­i­pal­ity would appoint three Trustees, with promi­nent min­ing sup­porter Zamile Qunya appoint­ing the fourth. This clearly does not ensure com­mu­nity own­er­ship of the Trust’s deci­sions.
  • While the Trusts are sup­posed to appoint the direc­tors of XolCo, XolCO cur­rently has eleven direc­tors, all min­ing sup­port­ers, includ­ing the iNkosi (Chief) of the Amadiba tra­di­tional com­mu­nity, Lunga Baleni. As the Trusts have not had any meet­ings in the com­mu­nity, it is denied that these direc­tors were appointed by the Trusts.
  • While few details have emerged, XolCo’s pur­chase of a 26% share in the Xolobeni project was funded, in part, by issu­ing pref­er­ence shares in Keysha that enti­tled MRC, and an entity known only as SGC, to 60% of Keysha’s div­i­dends.
  • We are deeply con­cerned that the financ­ing of Keysha’s agree­ment with MRCwill be sim­i­larly opaque and unfavourable.
  • Keysha has a sin­gle direc­tor, Mzwandile Maraqana, who is entirely unknown in the com­mu­nity.

It is our clients’ view that XolCo and Keysha were estab­lished by MRC to advance its min­ing inter­ests. They clearly were not estab­lished by the com­mu­nity itself, and were estab­lished with min­i­mal com­mu­nity con­sul­ta­tion.

Indeed, our clients’ view is that min­ing will not be accepted under any cir­cum­stances, much less the uncer­tain terms reflected inMRC’s announce­ment.

We are unsure whether the trans­ac­tion requires the approval of the Depart­ment of Min­eral Resources in terms of sec­tion 11 of the Min­eral and Petro­leum Resources Devel­op­ment Act. We have noted that the Deputy Min­is­ter of the Depart­ment will be in Xolobeni tomor­row and hope that he will clar­ify this point. If sec­tion 11 approval is required, we expect the Depart­ment to engage in informed con­sul­ta­tion with our clients, before mak­ing its deci­sion.

We there­fore reit­er­ate our clients’ call that the appli­ca­tion be dis­missed by the Depart­ment of Min­eral Resources imme­di­ately.

info@probonomatters.co.za

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