State diamond-mining company Alexkor will have to mothball some of its activities if the Richtersveld land claim is not settled, Public Enterprises Minister Alec Erwin said on Thursday.
Delivering his budget address in the National Assembly, he also hit out at the community’s legal firm, the Legal Resources Centre (LRC), over its opposition to a settlement agreement signed by himself and community leaders last month.
”It is a matter of regret that the LRC, [which] has done so much to support the community, now seeks to derail the settlement against the wishes of the elected leaders,” he said. ”This does this important public law institution no credit and, if they succeed, they will only bankrupt Alexkor and place many hundreds of people in the precarious position of being unemployed.
”I am quite certain that their counsel in this case is now ill-advised.”
Erwin’s remarks follow a fiery community meeting last Saturday at Lekkersing in the heart of the Richtersveld, where 71 of the 109 people attending voted to accept the agreement.
The LRC, which has represented the community through a decade of litigation and negotiation, said the agreement was signed against its advice, and that the document is flawed on crucial procedural, restitution and business issues.
It said that under the agreement, the transfer to the community of mining rights to the diamond fields currently being exploited by Alexkor is dependent on a future joint venture in which Alexkor as 51% partner will have the stronger hand. Another problem, the LRC said, is that the terms of the joint venture were not finalised in the agreement.
Committed
However, Erwin said on Thursday at a pre-speech media briefing that if the venture does not work out, ”then we still have to transfer the mining rights, but we’ve got to find a different mechanism”.
”What we are committed to, and we want this to be clear … we will meet our obligation that they get the mining rights.”
The joint venture is the quickest way to achieve this, and has the added advantage of giving the community access to income from Alexkor’s sea mining operation, which is not part of its land claim.
The minister said the uncertainty around the claim has placed Alexkor in a very precarious financial and operational position. ”Time is now of the essence, otherwise we will have no option but to mothball certain of the activities and dispose of non-core assets on a commercial basis,” he said.
Erwin said the settlement is ”very reasonable” and will make the community owners of a viable company. The reason the community holds only 49% of the venture was ”because we’re the senior partners”.
The state, and not the community, is providing capitalisation of R200-million, and the community will in any case in time take over control of the entire land mining operation.
”If you call it a hard bargain, it’s a very fair one, in my view,” he said. ”No one can be in charge of a massive asset and just immediately hand it over.”
De Beers
Erwin said a pact between the Department of Minerals and Energy and De Beers on a pooling of Alexkor and De Beers’s Namaqualand diamond-mining resources does not affect the Richtersveld agreement.
The state will begin detailed negotiations with De Beers soon and keep the Richtersveld community fully informed. It might well turn out that this offers further opportunities for the community.
Erwin said he has been immensely impressed by the Richtersvelders’ determination and courage ”in the face of vastly superior resources”.
The state has spent about R50-million fighting the community’s claim to the strip of land along the Namaqualand coast currently being mined by Alexkor, and restitution for the diamonds taken from it over generations.
The Land Claims Court case was suspended last year to allow the community, government and Alexkor to negotiate a settlement. — Sapa