NEARLY R1 billion was wiped off Coal of Africa's market value yesterday morning after state environmental inspectors fingered the company for transgressions at a second operation, this time the Mooiplaats colliery in Ermelo.
The stock fell 19 percent, its biggest one-day slide in more than two years, to an intra-day low of R7.55 after a Business Report article noted that the Mpumalanga government had issued a pre-directive to Coal of Africa subsidiary Langcarel last Thursday in which the mining
house was advised to stop operations within 24 hours.
The share recovered marginally to close 16.1 percent
lower at R8. During the session, the slide shaved off nearly R1bn from the group's market value.
By noon yesterday, the firm issued a statement to shareholders acknowledging receipt of a notice from the Mpumalanga Department of Economic Development, Environment and Tourism regarding Mooiplaats, but denying it had been asked to stop activities at the mine.
However, Business Report has a copy of the pre-directive delivered last week. It states: You are advised to cease with the unauthorised activities engaged with on the abovementioned farm within 24
hours of receipt of the notice in order to avoid further damage on the environment.
Pamela Ntuli, the provincial department's deputy director of enforcement, said yesterday she had asked officials in Ermelo to check if unauthorised operations
had ceased at Mooiplaats. The compliance notice is already ready because I suspect they haven't stopped, she said.
If Mooiplaats operations had not stopped, Ntuli would
arrange for police and government officials to deliver the compliance notice within days.
Coal of Africa told a different story in its statement yesterday, saying it may make an application for rectification within 10 days of receipt of the letter, being November 11, 2010, following which the department has stated that it may decide not to issue the company with a compliance notice.
In the pre-directive issued last week, Coal of Africa was told to cease unauthorised operations, appoint within 14 days an independent environmental practitioner to prepare a rehabilitation plan, submit this within 30 days and start rehabilitation within two days of the plan's approval.
The notice said department officials had conducted an inspection at Mooiplaats on August 16, and found Coal of Africa was undertaking activities for which no environmental authorisation had been obtained, as
required by the National Environmental Management Act.
The activities or transgressions included the storage of
coal stockpiles, operation of a coal beneficiation plant, mining activities in a wetland, absence of a pollution control dam, construction of an access road and
unauthorised waste disposal as well as explosives storage.
The offences at Mooiplaats follow soon after Coal of Africa was forced in August by the Department of Environmental Affairs to stop building access roads at the Vele colliery under construction near the Mapungubwe World Heritage Site.
The firm was instructed to empty fuel from a storage tank on the Vele site, stop further pipeline installations and not to use a dam on site for storing water or waste.
Coal of Africa chief executive John Wallington said last
week he hoped construction at Vele would recommence by the end of the year. The Vele saga
has delayed the transfer of Coal of Africa's primary listing in Australia to London.
Environmental bodies are actively objecting to industrial activity in the Mapungubwe area without an approved integrated regional development plan.