19th April 2005
Last month, BHP Billiton subsidiary Ingwe cancelled a coal recovery contract with the black-economically empowered group, which had developed a unique jigging concept that enables the recovery of coal from discard dumps for beneficiation.
Informing Yomhlaba of the termination, Ingwe alleged that an audit revealed a number of illegal and/or unethical practices carried out by the junior in its activities in relation to the contract. The allegations included manipulation and falsifying the mass and qualities of the product delivered.
But Yomhlaba has denied the allegations and has charged that Ingwe failed to substantiate any of the claims for terminating the contract.
Chief financial officer Johan Jonck told Mining Weekly Online that, to date, the group has not been able to obtain the relevant information from Ingwe, despite attempts to negotiate with the coal producer.
Jonck explained that, initially, Yomhlaba planned to seek a High Court interdict against Ingwe, but is procedurally obliged to exhaust all other legal avenues first.
“Hence we are current in the process of claiming damages from Ingwe,” he said.
Jonck said that the amount of damages that Yomhlaba would be seeking from Ingwe has yet to be quantified, but it is understood that Yomhlaba has spent R37-million to erect plants on the basis of its contract with Ingwe.
Jonck earlier slammed the manner in which Ingwe handled the issue, saying it is of “major concern”.
“Since the start of the contract, there have been seven amendments to the contract at the insistence of Ingwe, whereby these amendments have led to an expansion of Yomhlaba's business,” Jonck said earlier in a statement.
Yomhlaba's situation is made worse by the fact that this had been the junior's only contract and its termination prompted the group to ask the JSE Securities Exchange's AltX to suspend its share from trading. The mining junior listed on AltX in November last year.
However, Jonck stated that a new contract is in the pipeline, with the group currently in talks with an as yet unnamed party.
“These talks are looking good. At this stage we would not want to release any names or numbers, but an announcement is expected to be made within the next two weeks,” he said.
It is expected that the group's share will resume trading with the implementation of the new contract.
Edited by: Martin Czernowalow