DMRE distances itself from Russia’s Transasia, Umsobomvu rights saga
THE Department of Mineral Resources and Energy (DMRE) has denied that their officials were involved in the mining rights’ dispute between Russia’s Transasia Minerals and Umsobomvu Coal, owned by local businessman Hector Kunene.
This after Russian attorneys threatened to institute international arbitration proceedings against South Africa for failing to protect their client’s (Transasia) investment in accordance with the Bilateral Investment Treaties (BIT) of 1998.
The DMRE said the matter was a subject of litigation in the form of main and interlocutory court applications which primarily involved private disputes between the parties in which the department was partly involved, due to its role as regulator.
The department has distanced itself from the dispute.
Independent Media’s investigations unit revealed how Transasia had allegedly been defrauded from R458 million by Kunene, former owner of two mining sites in KwaZulu-Natal, who after having been paid for the rights, failed to transfer it in the name of Transasia, as per a Sale of Prospecting Rights Agreement between the two parties in 2012.
“To date, the department has elected to remain impartial in the private legal dispute between the parties, which, among others, relates to the validity of the impugned agreement.
“The government’s further conduct herein will be guided by thorough internal deliberation among relevant departments and with due consideration of legal advice,” said the deparment.
Transasia chief executive Luda Roytblat claimed that the DMRE had been covering up for Kunene.
He said that on at least three occasions in 2016, 2019 and last year, the DMRE had attempted to access the mining sites, ostensibly for monitoring and compliance purposes, accompanied by Kunene, however, the resident landowners objected and refused them access.
“In April 2016, the DMRE issued a complaint under Section 93 of the Mineral and Petroleum Resources Development Act (MPRDA), which may have had no other intended purpose than to threaten Transasia to cease operations, and to collect proprietary technical data regarding those operations,” Roytblat said.
Former Mpumalanga Premier, Transasia’s shareholder and chairperson, Mathews Phosa, highlighted the seriousness of the matter, and the severe losses attached to the international investment.
“This matter should not be politicised, it’s a business matter and there’s no need to involve politicians, as the regional DMRE in KZN wanted to previously. It should be dealt with by the law.
“We have already taken action against Kunene and have charged him. The DMRE will follow the legal course and we will ask them to transfer the rights to us.
“They can’t change the power of attorney given to us, and the fact that we have paid Kunene in full for the rights … I have no war with the DMRE, nothing whatsoever, I just want them to do what they are supposed to do,” he said.
Phosa stressed the importance of the DMRE doing what was right to encourage international investors to invest in the country.
He said, legally, Kunene should have no leg to stand on and he should allow Transasia to obtain the mining rights, “but he continues to lie before the court”.
It is alleged that Umsobomvu launched a questionable claim before the South Gauteng High Court in Joburg, supported by an affidavit from Kunene, which had subsequently been shown to contain false information in the matter.
“We have laid criminal charges against him, based on how he had lied in his affidavit about the matter, as well as about Transasia and its employees. While we are set to return to court on October 6 for the criminal matter, we still have to sue him for defamation of character,” said Phosa.
Roytblat said while Kunene allegedly lied to the courts and state organs, about Phosa and herself, saying that they were Russian mafia, he had also allegedly used devious methods in court to liquidate one of Phosa’s companies unlawfully and was now threatening to liquidate Transasia. “How can he liquidate a company that he received R14m from?” he asked.
Kunene previously denied that he or Umsobomvu had committed fraud and said allegations pertaining to Transasia’s contributions or losses were the subject of legal proceedings, whose veracity was yet to be tested in court.
Transasia, through their attorneys, in a letter to the DMRE, stressed how the department could not withhold an administrative process that was duly lodged in terms of the MPRDA, as the mere allegations by Kunene were not sufficient to withhold an administrative process and that the power of attorney could only be revoked through a court process.
Transasia’s legal representatives, Hammond-Smith, of Hammond-Smith Attorneys, confirmed on Wednesday that their client had instructed their offices to institute legal proceedings against the government to review the minister’s decision, as it seems that the DMRE sided with Kunene’s position.