Nkwe Platinum Close To Securing South Africa Mines Permit-Source
15 February 2012 - 7:25PM
Dow Jones News
Nkwe Platinum Ltd. (NKP.AU) is expected to receive as early as
Thursday a mining license from the South African government for
three sites in the country's platinum-rich Bushveldt region, a move
that should come as a relief to investors concerned about the
company's ability to retain and develop two promising projects, a
person familiar with the situation said.
A license from the Department of Mineral Resources could help
settle a long-running dispute over control of several blocks of
land between Nkwe, its major shareholder Genorah Resources Ltd. and
Anglo American PLC's (AAL.LN) Anglo American Platinum Ltd. (AMS.JO)
unit and its venture partner African Rainbow Minerals Ltd.
(ARI.JO).
Trading in Nkwe's shares has been halted in Australia since Nov.
9 pending a statement regarding the outcome of joint venture
negotiations.
Nkwe has for several years been fighting for control of land
that makes up two mining projects in the Bushveld that sit near
Angloplat's Modikwa mining venture with ARM and Impala Platinum
Ltd.'s (IMP.JO) Marula mine. It has during this time continued to
invest in the projects and has previously said it was pushing ahead
with a bankable feasibility study.
The mining license is expected to cover the Garatau, DeKom and
Hoepakrantz farms, the person said.
Nkwe's flagship Garatau and its Tubatse projects consist of five
sites with a footprint of more than 10,500 hectares. An earlier
study by the company and Genorah said they could develop two mines
with combined annual production of more than 1 million ounces of
platinum group metals. Mining giant Xstrata PLC (XTA.LN) in 2008
acquired an option to buy a 50% interest in the five properties,
subject to the completion of a bankable study.
However, the rights to the areas have been subject to an ongoing
and complicated dispute.
The challenges date back to 2007 when South Africa's then
Department of Minerals and Energy awarded prospecting rights for
nine tenements over land Angloplat had laid claim to. Angloplat
appealed for a court review of the government's decision, and
called for the rights to be set aside. Local media reports at the
time cited a government official as saying Angloplat hadn't
complied with the law in its own application for rights to the nine
properties.
Five of the rights went to Genorah and Nkwe, which have
continued to defend their claims.
Nkwe in early 2008 issued a statement on behalf of itself,
Genorah, Angloplat, ARM and the government, which said that after a
series of meetings the parties had agreed to abide by the
department's original decision to award the prospecting licenses
and to reject Angloplat's application. ARM and Angloplat later
denied any such agreement was reached.
In one of the many twists in the dispute, South Africa's highest
court in 2010 ruled in favor of a group of villagers and overturned
exploration rights to two tenements held by Genorah because of a
failure to consult properly with locals. However, a tribal
authority for the area defended Genorah's claim to the land and
claimed other villagers with no rights to the tenements had misled
the court.
Africa's Department of Mineral Resources in late 2010 awarded
rights to the Eerste Geluk farm that forms part of Nkwe's Tubatse
project to a local community following a fresh application process.
The decision is being appealed.
Nkwe last week said it remained confident ongoing negotiations
conducted with the aid of the Department of Mineral Resources were
on track. It at the time said it was "acutely aware of the valid
and substantial concerns expressed by shareholders due to the
extended period of the negotiation."
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094;
robb.stewart@dowjones.com
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