Con­tro­versy afoot with miner Kropz

Min­ing en­tre­pre­neur Mike Nunn, with the back­ing of mag­nate Pa­trice Mot­sepe, has em­barked on a new en­deavor – he wants to mine phos­phate next to the Lange­baan La­goon.

Finweek English Edition - - THE WEEK - Edi­to­rial@fin­ By David McKay

mikeNunn, the min­ing en­tre­pre­neur who brought us Tan­zan­ite One, which briefly stole the spot­light from di­a­monds, is back on our screens again as the driv­ing force be­hind Kropz, a pri­vately-owned com­pany that also has Pa­trice Mot­sepe as a backer.

The ba­sic premise of Kropz is to im­prove SA’s food se­cu­rity by min­ing and ben­e­fi­ci­at­ing phos­phate, a min­eral used to fer­til­ize soils. Apart from tick­ing the box of ben­e­fi­ci­a­tion, its devel­op­ment will also lower the coun­try’s need to im­port phos­phate from Europe.

Mot­sepe’s in­volve­ment is through African Rain­bow Cap­i­tal, which is owned by Ubuntu-Botho – a phil­an­thropic or­gan­i­sa­tion that has the Mot­sepe Fam­ily Trust, church groups, women’s groups and trade unions as share­hold­ers.

The last time we en­coun­tered Nunn he was bravely tak­ing on Zim­babwe’s govern­ment in a $500m le­gal suit heard in the In­ter­na­tional Court of Ar­bi­tra­tion in Paris dur­ing 2014, which chal­lenged the award­ing of plat­inum-bear­ing min­eral rights to a govern­ment-backed Rus­sian con­sor­tium.

Nunn, who now lives in Monaco, claimed his com­pany, Amari Plat­inum Hold­ings, had spent money prospect­ing the land but had been de­nied a min­ing right by then mines min­is­ter Obert Mpofu. Nunn won the case but it’s un­clear if the monies were ever paid.

Around the same time, Amari Plat­inum was in­volved in the seizure of $50m worth of di­a­monds in An­twerp, Bel­gium, on be­half of ex­pa­tri­ate Zim­bab­wean farm­ers who claim to have been forced off their land and were tak­ing the di­a­monds in com­pen­sa­tion. This bid didn’t suc­ceed.

Kropz, on the other hand, is seek­ing to usher in a some­what more peace­ful re­turn to South­ern Africa busi­ness for Nunn; its logo even sports a green heart where the ‘o’ should go. But there’s con­tro­versy afoot.

For­mer fi­nance min­is­ter Trevor Manuel in Oc­to­ber de­manded the de­part­ment of min­eral re­sources (DMR) “clean up its act” af­ter it granted a per­mit to Kropz, whose mine is sit­u­ated next to the Lange­baan La­goon, which is part of the West Coast Na­tional Park.

Manuel railed against “in­con­sis­tent ap­pli­ca­tion of reg­u­la­tions” by the DMR and de­scribed the en­tire ecosys­tem around Lange­baan La­goon as en­vi­ron­men­tally sen­si­tive: “How was it granted a per­mit to op­er­ate when there’s no wa­ter li­cence agree­ment for that mine in that place?” he asked.

The mine is Elands­fontein, which in its first phase will pro­duce 1.5m tonnes of rock con­cen­trate fol­low­ing a cap­i­tal cost of R1.35bn. The mine is fully funded, has a ready mar­ket, and will start pro­duc­tion in March 2017, says Michelle Lawrence, its chief op­er­at­ing of­fi­cer.

“We think we can change per­cep­tions around the min­ing if we make the right de­ci­sions up­front,” she says. “It will be a suc­cess story in terms of re­ha­bil­i­ta­tion.” Cur­rently, Kropz is de­wa­ter­ing the min­ing area in or­der to com­pletely rule out pos­si­ble poi­son­ing of a ma­jor aquifer than runs into the la­goon. There is “push-back”, how­ever, says Lawrence. West Coast en­vi­ron­men­tal groups are con­cerned about the im­pact of the mine and while Kropz be­lieves it has ticked all the boxes in due dili­gence and ex­e­cu­tion – there may be more po­lit­i­cal noise to come.

The West Coast En­vi­ron­men­tal Pro­tec­tion As­so­ci­a­tion (WCEPA) is cry­ing foul. Carika van Zyl, WCEPA chair­woman, says due process was not fol­lowed in the case of Elands­fontein’s per­mit­ting process.

The view of Kropz is that its min­ing per­mits were granted un­der the DMR’s one-stop-shop sys­tem, which ex­empts it from con­di­tions of the Na­tional En­vi­ron­ment Man­age­ment Act (NEMA). In terms of NEMA, a prop­erly filed ap­peal over a min­ing project is enough to trig­ger a manda­tory sus­pen­sion un­til the de­tails of the ob­jec­tion have been prop­erly picked through. Chief op­er­at­ing of­fi­cer of Kropz

The ba­sic premise of Kropz is to im­prove SA’s food se­cu­rity by min­ing and ben­e­fi­ci­at­ing phos­phate, a min­eral used to fer­til­ize soils.

Michelle Lawrence

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