Johannesburg — TWO women with strong links to national intelligence have emerged as directors of the company that has shocked SA's mining sector and set off alarm bells in the international community that finances its mining operations.
The company set to benefit from Lonmin having been ordered to stop selling associated metals from its operations is Keysha Investments 220, a group that counts the chairwoman of the Department of State Security's Intelligence Services Council as one of its two directors.
Lonmin is due to meet officials of the Department of Mineral Resources today to discuss the instruction, contained in a letter last week from the department's North West provincial manager, Aaron Kharivhe. It ordered the group, the world's third-largest platinum producer, to stop selling by-product metals such as nickel, chrome and copper immediately.
The development has again raised disquiet about the possible role of political connections in the award of mining rights in SA.
The move also threatens to undermine investor confidence in the sector at a time when mineral prices are showing a strong recovery, and raises fears SA will again miss out on booming commodity prices.
Imara SP Reid told clients on Friday: "Unless the situation is corrected soon, foreign investors will be forgiven for assuming not only that acquiring South African mineral rights is a fraught process, but in any event not worth the trouble if they can be rescinded arbitrarily and awarded to politically connected entities."
The controversy follows Kumba Iron Ore's appeal against the grant of a prospecting right over part of its Sishen iron-ore mine to Imperial Crown Trading 289. Imperial applied for a prospecting right over a 21,4% stake in Sishen after it reverted to the state when steel maker ArcelorMittal SA did not convert that stake to a new-order mining right within the prescribed time.
Lonmin stock fell the most of companies listed on the FTSE 100 on Friday after the group said it had received a letter demanding it stop sales of metals other than platinum group metals.
Old mining laws gave mining groups the right to sell associated minerals for their own benefit. The 2002 Mineral Resources and Petroleum Development Act "is silent" on this, Lonmin said.
The group is taking urgent legal steps against the department. Lonmin filed an application last year to the department to explicitly give it the right to sell these minerals, but the application did not cover all associated minerals as a prospecting right had been granted over a "small portion" of Lonmin's property.
Keysha Investments 220 applied for the prospecting rights for associated minerals in March last year. The rights were granted on May 12 this year. Keysha Investments 220 is a member of the HolGoun Group - a family-owned investment holding company set up by Sivi Gounden and his wife Vanessa, who are chairman and CEO of HolGoun respectively.
Mr Gounden served on the Lonmin board until October. He was director-general of the Department of Public Enterprises for five years until 2004.
A company search shows that Keysha's directors are Ms Gounden and Miriam Sekati.
Ms Sekati chairs the Intelligence Services Council, the human resources arm of SA's Department of State Security. Ms Gounden, at one point, was head of human resources for the National Intelligence Agency before leaving in 2002 - details confirmed by HolGoun.
"We cannot comment on Lonmin's specific dispute with the Department of Mineral Resources," said Anastasia Maimonis, group counsel for the HolGoun Group, but the application and award of the prospecting right was "done in accordance with the strict ambit of the law".
"Keysha consulted with Lonmin as part of the application process," she said.
Lonmin, however, said the first it knew of this was once the application was submitted to the department and it was notified of the application by the department. It immediately lodged an appeal against the process.
Lonmin says the associated minerals occur in the platinum reefs and cannot economically be mined in isolation. It intends selling 700 000oz of platinum this year and has said that associated minerals contributed about 80m to its revenue last year.
However, HalGoun is determined to press its rights. "HolGoun will prospect in order to determine viability of the project. If viable, HolGoun will apply for conversion of its prospecting right into a mining right. It will then proceed to beneficiation of the minerals," HolGoun said.
