Conspiracy theories swirl over MTN saga
As MTN grapples with demands from Nigerian authorities worth as much as $10.1bn, many analysts insist that ulterior motives are at work behind the scenes.
While it’s possible that regulators are acting in good faith and MTN has something to answer for, analysts say the Nigerian government is shooting itself in the foot by causing serious financial harm to one of the country’s biggest companies.
One theory is that Nigeria is retaliating after SA authorities recently detained a Russian ship bound for the West African state. The ship was carrying illegal mining explosives, according to the Hawks.
Other commentators claim that the Nigerian government is desperate for foreign exchange and that funds are needed to bolster the fiscus ahead of February 2019 elections.
Nigerian media houses say some people may have a financial interest in MTN’s pain, since it’s customary for law firms and “whistle-blowers” to take cuts of successful fines there.
Another analyst says a hostile takeover of MTN Nigeria could be in the works, whereby authorities cripple the company with fines and then pawn it off — presumably to a politically connected person or group — for a small sum.
A more plausible theory is that regulators are trying to scupper MTN’s initial public offering. By agreeing to a local listing, authorities agreed to reduce MTN’s 2015 fine for failing to disconnect unregistered SIM cards, from $5.2bn to $1.7bn. But they have imposed a hard deadline for that condition to be met — the first half of 2019. If MTN misses that deadline, it will have to pay the rest of the initial fine, another $3.5bn.
The vision outlined by DRD Gold CEO Niel Pretorius of consolidating millions of tons of unsightly tailings dumps west of Johannesburg, processing them through a mega-plant and cleaning up an environmental mess is hard to argue against.
However, a stumbling block could be the increasing switch by gold companies in SA to premined material lying in dumps on the surface near processing plants, offering quick, relatively cheap and safe ounces.
While DRD Gold is a dedicated tailings retreatment specialist, pushing 2-million tons of material a month through its Ergo plant near Brakpan, others are fast catching up.
Anglo Gold Ashanti owns the Mine Waste Solutions tailings retreatment business, while Harmony has a sizeable tailings retreatment business it plans to grow. With scant money going into large underground gold mines, apart from sustaining capital, and no new mines built in recent years or plans for any such operations, this is the future of gold mining in SA.
Pan African Resources recently shut its underground Evander mine as it brought its R1.74bn Elikhulu tailings project into production as quickly as it could, intending to treat at least 1-million tons a month.
Whether DRD Gold will achieve its vision over the next two years remains to be seen. The economic sense is apparent. By consolidating more tailings, the size of the potential plant could be doubled to 2.4-million tons, removing harmful dumps more quickly and placing their remains on a more environmentally friendly dump.