Communities deny empowerment is done deal at Coal of Africa’s Makhado project

They deny being part of empowerment deal

COMMUNITIES around Coal of Africa Limited’s (CoAL) R3.9 billion Makhado project in Limpopo have denied being part of the empowerment structure the company announced it had completed on the JSE news service on Friday.

CoAL said on Friday that it was pleased to announce that it had concluded agreements with broad-based black economic empowerment (B-BBEE) partners for their acquisition of 26 percent of the Makhado hard coking and thermal coal project.

Conclusion of the transaction would ensure the project complied with mining legislation and satisfied one of the last remaining requirements for the granting of a New Order Mining Right.

Wally Schultz, the chairman of the Save our Limpopo Valley Environment, said: “This is outrageous, not one of the seven communities want CoAL to establish a mine here.”

Thomas Chilongo, a spokesman for Chief Mudimeli and Christo Reeders, an attorney acting on behalf of Chief Mudimeli also further confirmed opposition to the Makhado project.

The Mudimeli are the host community for the project.

No compensation to the communities for the land. They have to buy shares in their own land.

Interdict

The Limpopo High Court in December issued an interdict against CoAL’s Makhado project halting any development of the mine until the firm had resolved several issues, including the empowerment arrangements and pending environmental impact assessments.

In its stock exchange news announcement (Sens) announcement on Friday, CoAL said the Makhado Colliery Community Development Trust, representing seven local communities, had acquired 20 percent of the project and a further 6 percent had been acquired by Yoright Investments, a company formed by black entrepreneur Mike Nkuna, whose shareholder grouping would include historically disadvantaged South Africans.

Reeders said: “We are involved in litigation against CoAL, there is a review application pending against the company and an interdict made in December last year.”

Opposition

But CoAL spokeswoman Charmaine Russell of Russell and Associates said the company was challenging the interdict to have it set aside. The interdict, she said, was “to stop the company from commencing with any activities listed in our environmental authorisation”, with some government departments as joint respondents.

“We do not anticipate that this process will affect the timetable of the project.”

The Makhado project is the fifth strategic priority in the firm’s turnaround strategy.

Community activists have raised concern about the sustainability of the empowerment structure and the requirement that the beneficiaries had to seek finance from formal institutions to fund their stake.

“They are not compensating the community for the land, they have to buy shares in their own land. If the price of coal falls, the community will be liable for the losses made. CoAL is simply empowering the banks,” one of the activists said.

Among complaints from the communities were that CoAL had involved politically connected business people, had sowed division in the traditional authority structures, had orchestrated the election of councils that received kickbacks and was enticing the communities with food parcels.

“We view the allegations of bribery and illegal conduct in a very serious light, and we will not hesitate to challenge these allegations legally.

“We follow an inclusive engagement process, aligned very strictly to the legislative framework outlined in the Minerals and Petroleum Development Act, and will continue to do that during the operation of the mine,” CoAL said.

Coal of Africa’s share price was unchanged at 29c on Friday.