 JOHANNESBURG (miningweekly.com) – London- and Johannesburg-listed platinum-miner Lonmin on Wednesday softened its previously strident tone, extended a thank you to South Africa's Department of Mineral Resources (DMR), and made no further mention of the court proceedings that it said it was bringing against the department.
Instead, the company headed by CEO Ian Farmer, said that it would like to thank the DMR for its cooperation in expediting the approval of its Section 102 applications.
Lonmin added that the disputed prospecting right granted to HolGoun company Keysha Investments 220 covered "a small area of Lonmin property where only upper-group two (UG2) was currently mined".
HolGoun CEO Vanessa Gounden complained in a media release that ‘onerous and impractical" Lonmin conditions were preventing Keysha from carrying out a High Court-sanctioned accounting process, and that it might revert back to the court in order to ensure that the court order could be implemented.
Lonmin revised downwards its estimate of sales of associated minerals from the Keysha area from the $80-million a year originally estimated, to a far more moderate $11-million.
Lonmin said further that it remained entitled to mine and sell the associated minerals mined from this area, but made no mention of the compensation that it would be required to pay to rights holder Keysha.
The platinum miner said that it had received written DMR confirmation, which rescinded the DMR's August 3 instruction, which required Lonmin to refrain from selling nickel, copper, chrome and any other minerals associated minerals, other than platinum-group metals.
Lonmin said that it would notify its customers that deliveries of associated minerals would recommence immediately.
The DMR had further confirmed that all of Lonmin's Section 102 applications had been approved, thereby clarifying Lonmin's right to mine and dispose of all the associated minerals at all its properties other than the small area, which was subject to the Keysha prospecting right.
"Lonmin would like to thank the DMR for its cooperation in expediting the approval of these Section 102 applications. The disputed prospecting right granted to Keysha covers a small area of Lonmin property where only UG2 is currently mined. Sales of associated minerals from this area amounted to $11-million in 2009," the company said.
Former DMR deputy director-general Jacinto Rocha, now a mining law consultant, said that a statutory facility was already in place that allowed Lonmin to extract and dispose of the nonplatinum minerals it mines, and to pay compensation to mineral rights holder Keysha for those minerals over which it held rights.
Rocha added that a precedent had been set by the case of Trojan Exploration versus Rustenburg Platinum, which allowed miner Anglo Platinum to pay compensation to rights holder Trojan.
The DMR said on Tuesday that it was "puzzled" by Lonmin's ‘lost rights' claim and that, although it was in line to be awarded associated-minerals rights, these would not be in the area where Keysha had already won a prospecting right.
"The Department is puzzled by the fact that Lonmin chose not to apply for the inclusion of these minerals earlier. It only sought to do so once the Keysha application process was well under way," the DMR said, noting that the Keysha area covered a relatively small portion of the total Lonmin conversions.
The DMR said that it was important to draw a clear distinction between the Lonmin mining areas covered by the DMR order compelling Lonmin to cease disposing of associated minerals, and the Lonmin mining areas over which Keysha had been awarded a prospecting right.
The DMR said that it had conducted routine inspections when it received Lonmin's Section 102 applications, and that, in the process of these inspections, it had discovered that Lonmin was disposing of associated minerals to which it did not have a mining right; and had no choice but to order Lonmin to stop its "illegal" activities.
The DMR, headed by director-general Sandile Nogxina, said that Lonmin's ‘lost-rights' statements had been made at a time when decisions on its associated-minerals applications were imminent - but not in the Keysha prospecting right area.
It went without saying, the DMR said, that Lonmin could not have lost rights that had not been awarded to it.
The DMR recalled that Lonmin, unlike most other companies, had omitted to apply for consent to mine associated minerals when it converted its platinum-group metals rights between 2006 and 2008, and only applied for permission to mine these in December 2009, long after the PGM conversion had been issued.
Subsequently, Lonmin withdrew its Section 102 applications for the area awarded to Keysha.
DMR said that a court order was in operation to compel Lonmin to account for its disposal of the minerals awarded to Keysha under its prospecting right.
When applicants applied for prospecting and mining rights for unbespoken minerals, the DMR said that it had no choice but to process compliant applications to finality.
Any conduct to the contrary would amount to a total disregard of the Constitutional right of every person to administrative action that was lawful, reasonable and procedurally fair.
Miners of minerals could mine and sell associated minerals, but then the holder of the right to the associated mineral had to be compensated, either by way of agreement, or through an arbitration process.
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