The South African government wants Anglo American to hand over land containing substantial platinum deposits
Jaspreet Kindra and Belinda Beresford
The Department of Mineral and Energy Affairs has asked Anglo American Platinum (Amplats) to return the mineral rights to 24 platinum-rich farms located in the former Lebowa territory in Northern Province. Amplats, the world’s largest platinum producer, has the rights to 26 farms but is only mining two of them.
The platinum deposits in the area could become the biggest platinum reserve in the world, after the mines in the North- West are depleted.
Amplats this week denied that its platinum rights are under any threat. A company representative, Mike Mtakati, told the Mail & Guardian the information received from the department “was incorrect”.
But according to the department’s northern region head of mineral development, advocate Martin Mononela, the move is the result of continued negotiations between Amplats and the government. Mononela, along with Nchakha Moloi, an adviser to the Ministry of Mineral and Energy Affairs, is representing the South African government in the negotiations.
“Amplats can retain the farms on which they are mining, but they must return the ones which are lying dormant,” Mononela added.
Jan Bredell, acting director general of the Department of Mineral and Energy Affairs, said that the release of all the farms “may not necessarily be the outcome.
“The negotiations are at a sensitive stage – there might be a compromise.”
A change in the royalties paid by Amplats is also understood to be on the cards, with speculation that the royalties will now be determined by the minister of finance – a move which is likely to hit Amplats with a higher royalty bill. Mtakati said he was unaware of developments involving changes to the royalty payments made by Amplats. The company currently pays royalties of R5- million a year on a net profit of R122- million from just one of the farms currently being mined.
Amplats gained control of the mining rights through a series of agreements with the former Lebowa government, and later the Lebowa Minerals Trust (LMT). This trust took over the mining rights when the homeland government was dissolved. The agreement resulted in the formation of several joint venture companies.
However, the status of these agreements has been in dispute. Mineral and energy affairs director of mining rights Jacingo Rocha says there were “serious flaws” in the joint venture agreements.
According to Mononela, “Amplats’s deal with the former Lebowa government and subsequently the Lebowa Minerals Trust, called the joint venture agreement, was a rip-off.”
Mononela says a clause in the agreement gives the government the right to review the deal in the event of a change of governance in the country. “It is obvious to everyone that there has been a change of governance in the country – Amplats has to give opportunity to other investors.”
He said the agreements “gave the company rights to mine all of these farms indefinitely. This is unfair: we feel there are other investors who need to be given the opportunity to prospect in the area too.
“There is also a possibility of looking at black empowerment concerns.”
He pointed out that the government cannot enter into a joint agreement with a private enterprise involved in mining. “We cannot be a player and a referee at the same time.”
However, he added that the minister has discretionary powers in terms of the Mineral Act to either hold on to or return the farms to Amplats.
The government’s decision to take back the land from Amplats comes amid a long- running dispute over the ownership of the area’s mineral rights.
Now disputes between local chiefs, and with the government, are threatening to result in a slew of lawsuits, with some local chiefs accusing the government of stripping them of their rightful inheritance.
The affair has been brought to crisis point by the gazetting this month of the Abolition of the Lebowa Minerals Trust Draft Bill. This proposes merging the functions of the trust with the department, giving direct control of the mineral rights to central government.
Responding to this, more than 100 kgoshis (traditional leaders) in the province formed the Lebowa Mineral Beneficiary Forum which, last week, demanded that Minister of Mineral and Energy Affairs Phumzile Mlambo-Ngcuka withdraw the “unconstitutional” Bill within seven days.
The forum’s legal adviser, Thokwane “Post” Moloto, has described the Act as “confiscation”. The trust itself is also fighting its planned demise.
The department argues that the trust is a government entity and therefore can legally be absorbed into the state. But the forum claims the trust is a private holder of mineral rights in trust for the inhabitants of Lebowa.
Under previous regimes, black people were not allowed to own property. Their land was held in trust by trustees – some of whom diligently lived up to their responsibilities, while others were less constrained. The forum claims that this means the LMT mineral rights were held in trust for the local people – and they want them back.
According to Moloto, the government is misconstruing the situation. “Black people were not allowed to own property – the minister of native affairs was the guardian of all the natives, so one will find deeds with the South African government’s insignia on it.”
Sources close to the LMT claim that out of the 1E500 title deeds to the mineral- rich farms that it controls, 1E432 are registered in the trust’s name. They claim the total value of the assets controlled by the trust is estimated to be in the region of R280-million to R300- million. The trust’s income through royalty alone is said to be about R20- million a year.
Part of the dispute rests on different versions of the Act which created the LMT. The government contends that the Afrikaans version, which says that the trust shall be administered for the material benefit and moral welfare of Lebowa, is valid. Legally, the government of South Africa succeeded the bantustan governments – therefore the government owns the mineral rights.
The kgoshis cite the English version, which says the trust should operate for the benefit of Lebowa and “its inhabitants”. For the kgoshis the key word is “inhabitants”. However, it was the Afrikaans version which was signed by the state president, and therefore, lawyers say, this is the legal version.
Last week the department held a workshop with the kgoshis to try and resolve the dispute. The attempt failed. Forum chair Kgoshi Magale Lehwelere asks, “How can they dissolve the trust without taking the benefit of the people of Lebowa into consideration? They see us as a soft target – why are they not taking away the mineral rights vested with giants such as Anglo American, the churches, the banks and other private individuals?”
However, there are also disputes within the tribes as to the validity of the kgoshis’ claim to the mineral rights. Some individuals claim that their families owned the land and rights in their own right – and that therefore they are the true beneficiaries.
The government sees no dispute. According to Rocha, the government views mineral rights “as part of the patrimony of South Africa”, as are water rights. The government intends to utilise this patrimony for the benefit of all South Africans, he said.