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File Image/ANA

Zwane suspended Lonmin's operating licence for 3 days

By Dineo Faku Time of article published Mar 26, 2018

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JOHANNESBURG - Former Mineral Resources Minister Mosebenzi Zwane suspended Lonmin’s operating licence for three days last year.

According to documents seen by Business Report, Zwane suspended the licence on ­November 28 and lifted it on December 1 in an about-turn.

Zwane suspended the licence after the world’s third-largest platinum producer failed to meet its human resource development and local economic development commitments contained in its Social and Labour Plans for 2014 to 2017.

Gugulethu Cutshwa, the Department of Mineral Resources’ (DMR) acting chief director in the western regions, responsible for the North West and Gauteng regional offices, set aside the suspension in a letter to Lonmin dated December 1.

“Given your willingness to comply with the said requirements by submitting a revised action plan in accordance with a template which the regional manager will provide by December 3, I have decided to favourably consider the ­setting aside of the November 28 order.”

In a letter to Lonmin dated November 28, 2017, Thozama Basi, the DMR regional manager in the North West, gave a directive for the suspension of Lonmin’s licence with immediate effect in terms of Section 93 of the Mineral Resources and Petroleum Development Act (MPRDA). Section 93 of the MPRDA gives the department the right to enforce compliance with the act by ordering mines to cease operations.

In the letter, Basi said that while mining activities were suspended, the company was to address its contraventions before December 6, failing which Section 47 of the MPRDA would be invoked.

Section 47 gives the minister power to suspend or cancel mining rights or permits to stakeholders in breach of legislation.

Among others, Lonmin failed to meet targets to roll out bulk water supply infrastructure, household sanitation, public safety street lights, internal and external learnerships and bursaries, according to the letters.

A defiant Lonmin said it would not comply. Its legal representative, Cliffe Dekker Hofmeyr, charged the suspension was unlawful and procedurally unfair in a letter to the director-general of the DMR dated November 29, 2017.

“Your conduct in issuing a directive was unlawful, unreasonable. It is common knowledge that our client is facing severe economic hardship. Its inability to meet its initial human resource development and local economic development are well known to your department To seek to halt our client’s operations, thereby denying it access to income, is neither logical nor reasonable, and will result in fewer available resources with which to comply with its resource development.”

The ministry instructed Lonmin to submit a revised plan on January 16, 2018, which it accepted two weeks ago.

“The plan submitted is acceptable; the company should report quarterly on progress,” the DMR said on March 13.

The papers were lodged as part of an affidavit in the ongoing court battle in which the Mining Forum of South Africa wants the company’s licence to be suspended for failure to meet its obligations.

Forum president, Blessings Ramoba, said it was illegal for the DMR to have reinstated the licence while the matter was before the court. “The suspension of Lonmin’s licence was lifted after we took Lonmin to court for not meeting its obligations to the Social and Labour Plans. The court must instruct the DMR to withdraw the directive. It is illegal. DMR has not been consistent,” he said.

Lonmin was ordered to ­rectify non-compliance with the MPRDA last August.


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