Lonmin says it is a victim of vexatious litigation

The Mining Forum of South Africa has applied to the North West High Court to have the mining licences suspended of Lonmin, as well as Eastern Platinum and Western Platinum (both controlled by Lonmin). 

The Forum, a not for profit organisation that seeks regulatory compliance in the mining industry, says Lonmin has shirked its Social and Labour Plan (SLP) obligations.

Chris Loxton, counsel for Lonmin, told the court in Mahikeng on Friday that the application is incompetent, vexatious and must fail. He said the case against the mining companies was so deficient, the court should grant a cost order against the two applicants, the Forum and its president, Blessings Ramoba.

All mining rights in South Africa are granted in terms of the Mineral and Petroleum Resources Development Act (MPRDA) and are subject to the fulfilment of SLPs intended to uplift surrounding communities and provide jobs and skills.

The forum argued that the three mining companies had failed to honour their SLPs spanning a period of five years, and that the minister was obliged under law to suspend their mining licenses. The minister of mineral resources, Gwede Mantashe, is also a respondent in the case.

The Forum is trying to stop the proposed R5-billion takeover of Lonmin by Sibanye-Stillwater on the grounds that this would erode the group’s SLP commitments to the community. The takeover would include Lonmin’s Marikana operations, responsible for 95% of the group’s output, and the scene of the massacre of 34 striking mine workers in 2012.

The Forum argued that conditions for mine workers and the surrounding communities were atrocious, with many miners living in informal settlements. Lonmin had failed in its promise to provide schools, health facilities and other infrastructure in terms of its 2014 SLP.

Lonmin argued in its papers that while it had not spent the full amount outlined in the original SLP, this was due to radically deteriorating economic conditions. The mining group pointed to the roughly R680 million over three years spent on upliftment programmes and nearly R12-billion in BEE procurement as evidence of its commitment to its SLP obligations.

Loxton argued that rather than bringing its case before the North West High Court, the Forum should have sought a judicial review in terms of the Promotion of Administrative Justice Act (PAJA), which was crafted to allow members of the public to challenge decisions taken by state functionaries.

“It is entirely unclear what relief the applicants now seek. They have shifted ground as they met objections to their cause of action,” said Loxton.


“Let’s apply some logic to this,” said North West High Court Judge President Monica Leeuw, addressing Advocate Matlhaba Manala, who represented the Forum. “For Lonmin to comply with its (SLP) plan, they must be operational?”

“Yes,” replied Manala.

“How will they comply if operations are suspended?” asked Judge Leeuw.

Manala replied that the granting of Lonmin’s mining licence was conditional on it having the financial resources to conduct mining and on fulfilling its SLP.

Judge Leeuw said she would have a problem granting an order to suspend operations while at the same time obliging the companies to fulfil their SLPs.

Both Lonmin and the Minister, represented by Advocate Moses Mphaga, argued that the SLP obligations are not cast in stone, and are subject to review as economic conditions dictate.

Lonmin presented the court with a supporting affidavit from Harvey Wainer, professor at Wits University’s School of Accounting, showing that the Forum had misread Lonmin’s financial statements in arriving at its conclusion that the company had sufficient cash to implement its SLP commitments yet had ducked its obligations. Wainer’s affidavit points out that Lonmin recorded an aggregate loss of R49 billion over the previous four financial years.

Judge Leeuw questioned the Forum’s legal standing to bring this case before the High Court. Manala argued that it was being brought in the public interest.

The Forum’s papers accuse the Department of Mineral Resources (DMR) of failing to act against Lonmin when it was aware of its non-compliance with its SLP commitments.

But Mphaga described the steps the DMR had taken to investigate and notify Lonmin of its SLP non-compliance. The mining company was given time extensions to comply with its obligations, and subsequently filed an amended SLP, at which point the Department then withdrew its threat to suspend Lonmin’s mining licence. Therefore the DMR was not delinquent in discharging its legal duties with regard to Lonmin’s SLP and mining licence, argued Mphaga.

Judgment was reserved. — GroundUp

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Ciaran Ryan
Guest Author
Advertising

Coalition politics and law: The fight over Tshwane

With coalition politics on the rise, particularly in local government, this kind of court case is likely to become more common

High court declares Dudu Myeni delinquent

Disgraced former SAA chairperson Dudu Myeni has been declared a delinquent director by the...

SANDF inquiry clears soldiers of the death of Collins Khosa

The board of inquiry also found that it was Khosa and his brother-in-law Thabiso Muvhango who caused the altercation with the defence force members

No back to school for teachers just yet

Last week the basic education minister was adamant that teachers will return to school on May 25, but some provinces say not all Covid-19 measures are in place to prevent its spread
Advertising

Press Releases

Road to recovery for the tourism sector: The South African perspective

The best-case scenario is that South Africa's tourism sector’s recovery will only begin in earnest towards the end of this year

What Africa can learn from Cuba in combating the Covid-19 pandemic

Africa should abandon the neoliberal path to be able to deal with Covid-19 and other health system challenges likely to emerge in future

Coexisting with Covid-19: Saving lives and the economy in India

A staggered exit from the lockdown accompanied by stepped-up testing to cover every district is necessary for India right now

Covid-19: Eased lockdown and rule of law Webinar

If you are arrested and fined in lockdown, you do get a criminal record if you pay the admission of guilt fine

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

Call for applications for the position of GCRO executive director

The Gauteng City-Region Observatory is seeking to appoint a high-calibre researcher and manager to be the executive director and to lead it

DriveRisk stays safe with high-tech thermal camera solution

Itec Evolve installed the screening device within a few days to help the driver behaviour company become compliant with health and safety regulations

The best local and international journalism

handpicked and in your inbox every weekday