JOHANNESBURG (miningweekly.com) – As South Africa’s Department of Mineral Resources (DMR) announced that only a court of law was in a position to review the failed appeal that LSE- and JSE-listed platinum major Lonmin had lodged against a prospecting right being granted on its mine property, right holder Keysha said it had submitted an application to mine on the Lonmin land.

HolGoun’s Keysha holds the right on the farm Middelkraal in the North West province where Lonmin’s Marikana operation is situated.

The DMR said that after careful consideration it had decided to confirm its previous decision to grant Keysha the right to prospect for chrome, iron, nickel, lead, zinc and copper where Lonmin had the long-held right to mine platinum-group metals (PGMs).

DMR director-general Dr Thibedi Ramontja said Lonmin’s old-order mining right referred only to PGMs and not the minerals Keysha was pursuing.

The request of Lonmin’s subsidiary Western Platinum and Eastern Platinum companies for the right to other minerals did not meet the legislative requirement of being mineral specific.

Ramontja said it would thus be inappropriate to withdraw Keysha’s right as that would create legal uncertainty, which might compromise the important principle of security of tenure.

He found the Keysha award to be “lawful and justifiable” and believed that only a competent court would be able to review the decision.

As matters stood, Keysha was the only entity that was entitled to mine and sell the non-PGM minerals obtained from the Lonmin property and HolGoun CEO and Keysha chairperson Vanessa Gounden said that her company had submitted an application for a right to mine the non-PGM minerals.

When the Lonmin appeal was lodged in August 2010, former South African Public Enterprises DG and then HolGoun executive chairperson Dr Sivi Gounden said that his company had complied with all the requirements relating to the awarding of the prospecting right on part of the Lonmin property.

Gounden, also the former CEO of project house Bateman, was commenting after the DMR had ordered Lonmin to stop selling nickel, copper, chrome and any minerals other than PGMs.

It was then that Lonmin lodged its appeal to have the awarding of the right to Keysha overturned.

HolGoun's application for chrome rights was understood at the time to cover virtually the whole of South Africa's Bushveld Complex, and not merely the Lonmin property.

In filing its application for non-PGM minerals, Lonmin was said to have omitted an upper group two (UG2) reef area, over which HolGoun's Keysha Investments 220 had been awarded the prospecting right.

HolGoun's chrome strategy reportedly involves the beneficiation of UG2 tailings into a low-grade ferrochrome, using direct current (DC) arc furnace technology.

At the time of the dispute entering the public domain, Lonmin made the point that Gounden had the previous year resigned as a member of the Lonmin board of directors, to which Gounden retorted that Lonmin had been aware of HolGoun and its operations, including HolGoun's chrome strategy and that no potential for any conflict of interest had been raised during his tenure as director.

Lonmin appealed both the original March 2009 application and the award of the prospecting right.

On the technical side, HolGoun is understood to have completed a bankable feasibility study on the conversion of UG2 through DC technology and smelting to provide a low-grade ferrochrome.

Several analysts have made the point that the disputed associated minerals are inextricably linked to PGM mining, with chrome occurring in South Africa's platinum orebodies.

Some have also expressed the view that, on occasion, it is unavoidable to mine one without mining the other, with others adding that it was impractical to split PGMs ownership from the other minerals that were physically and chemically associated with PGMs.

Even if platinum companies were ordered not to sell co-products like nickel and chrome, they could not avoid having to mine them when they were contained in the same rock, analysts have added.

The mining of co-product metals is common throughout South Africa's Bushveld, which is something of an Aladdin's cave of platinum and chromium treasure.

Lonmin and other platinum miners have chrome offtake deals with ferrochrome producers.

In 2009, nickel, copper and chrome sales contributed 8% of Lonmin's revenue at about $80-million.
 

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