The terms of a mining deal struck between an Australian firm and a black empowerment company over titanium deposits in the Pondoland region of the Eastern Cape are cause for "enormous disquiet", say conservationists.
They have urged Minerals and Energy Minister Phumzile Mlambo-Ngcuka to "begin to take an active interest in the matter", and thoroughly investigate plans to mine in the area.
Perth-based Mineral Resource Commodities (MRC) recently announced details of an empowerment deal with a Transkei-based company, Xolco.
The deal makes Xolco equity partners in the Xolobeni Minerals Sands Project, with a 15 percent shareholding subject to certain conditions.
The Xolobeni project, if given the green light by government, will allow the mining of titanium mineral sands along the Pondoland coast, in an area already earmarked for the development of a new national park.
MRC's mining plans are being fiercely opposed by the Save The Wild Coast Coalition, spearheaded by the Wildlife and Environment Society of South Africa (WESSA).
In a statement, WESSA conservation director Cathy Kay said under the deal MRC has reached with Xolco, the empowerment company had not been granted a shareholding.
"They will have to buy it. The first tranche of 5% will cost $2,6-million (about R18-million), the second tranche of 10% will cost $8-million (about R55-million).
"MRC commodities states that it will assist the community in obtaining funding, but it appears that most of the income earned by the community will go towards paying off the debt," Kay said.
She said the price put on the shareholding was calculated according to income projections.
"But according to an independent titanium supplier, there is an over-supply of heavy minerals on the market, which has meant that the price has deteriorated sharply.
"It appears unlikely that the income projections of the mining company are realistic. If this is true, it is possible that the projected income for the black empowerment company may never transpire."
Kay said MRC appeared to be a very small company, with little experience in mining heavy minerals.
"There are fears that it will obtain the mining permission, only to sell it on to another company for a profit.
"There are many aspects to this mining deal that are causing us enormous disquiet," she said.
Kay appealed to Mlambo-Ngcuka to consider the ramifications of mining in the region very carefully.
"I feel that this whole mining issue should be thoroughly investigated, and I call upon the minister... to begin to take an active interest in this matter. It would be a tragedy if we sold out our heritage in this way," she said.
The WESSA statement also drew attention to an apparent about-turn by one of the Xolco signatories.
"Zamile Madiba Qunya, a community leader, was an outspoken opponent of the mining until two months ago.
"In a television interview filmed towards the end of June, (he) was particularly scathing of the mining company's lack of consultation and feared for the impact that the mining would have on the community's fledgling eco-tourism industry.
"Now, a bare two months later, Qunya has emerged as an empowerment partner in a multi-million rand equity deal," the statement said. Sapa
Monday 20 October 2003
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