The Bapo ba Mogale community in North West province has taken its traditional council and platinum mining giant Lonmin to court, demanding that they lay bare details of a R546-million empowerment deal they signed last year.
The community, through their liaison committee, Serodumo Sa Rona, and individual community members filed their application in the Pretoria High Court on Thursday last week.
Addressing a press conference in Johannesburg at the Ford Foundation, Julius Manyama, chairperson of the committee, said the main purpose of the application was to have the share transaction between the Bapo ba Mogale Traditional Council and Lonmin reviewed and force the company to reveal the signed documents recording the deal.
The community is also demanding full consultation with it. “One of our primary concerns is that nearly nothing is known by the community about the terms of the transaction or its consequences,” Manyama said.
The deal was signed in July last year at a community meeting where people were asked to vote on the deal allegedly without having seen the agreement. According to a press release announcing the deal the following day, Lonmin said that transactions reflected in the agreement would enable it to meet its black economic empowerment target.
Under the agreement, the community will waive its statutory right to receive royalties from Lonmin’s operating companies in exchange for a lump sum payment that will be used by the Bapo to buy shares in Lonmin.
The community will also receive a deferred royalty payment of R20-million a year over five years. Eastern Platinum will acquire 100% ownership of Bapho ba Mogale Mining Company, which owns a 7.5% stake in the Pandora joint venture that Lonmin shares with Anglo American Platinum (Amplats).
Manyama said the community had not been provided with any of the relevant documents relating to transaction, including the agreement itself or the due diligence report.
He said that from the little they had seen of the terms of the deal, there were serious concerns. “Without being given an opportunity to view and interrogate the relevant documents relating to this deal, the community has no idea whether or not it is in a better or worse position than before the deal was entered into.” he said.
Manyama also challenged the legality of the meeting where the agreement was signed. “The traditional council did not have the authority to enter into the transaction on behalf of the community, given that the council was not properly constituted at the time and was gazetted more than a week after it was decided to enter into the transaction,” he said.
Manyama said he hoped the case will set a precedent that ensures respect for communities and their customs, good community engagement, openness and transparency in decision-making.
The case is expected to be heard in court soon as all the respondents have filed answering papers.
* Got a tip-off for us about this story? Click here.
The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.