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Clarke: MRC pulls Pondoland investment. Beginning of end or end of beginning?

By John GI Clarke*

John Clarke at Mtentu Hutted Camp, Wild Coast October 2006
John GI Clarke

MRC Ltd has announced that it is disinvesting its 56% share in Transworld Energy and Minerals Pty Ltd, the applicants for the Xolobeni Mineral Sands project on the Pondoland Wild Coast, and has signed a Memorandum of Understanding with its Black Economic Empowerment partner “Keysha Investments 178”.

It is the first time any mention has ever been made of Keysha Investments 178 in any official announcement by MRC, but the existence of the company was first discovered way back in 2007, in the original shareholding agreement that was included in the very first mining rights application, lodged in March 2007. It was only thanks to an application made under PAIA that the Amadiba coastal residents came to know about Keysha Investments 178. Hitherto they had been told that the BEE partner with MRC was the Xolobeni Empowerment Company, which had been registered in 2003 with Zamile Qunya, attorney Maxwell Boqwana and Patrick Caruso (younger brother of Mark Caruso) as first and founding directors.

Xolco had by then already been exposed by the media as lacking any legitimacy as a community based structure. In late 2006 Qunya and Boqwana ‘resigned’ in embarrassment and proceeded to co-opt certain hand-picked local residents as ‘directors’ to give plausibility to the fiction that Xolco was “representative of local residents”. (Patrick Caruso had resigned a few years earlier). One of the co-opted directors was Mr Nkululeko Msabane, headmaster of Baleni Senior Secondary School. He spilled the beans about the sorry saga in 2010 in this interview.

Interestingly in the 2007 Shareholder Agreement there was no mention made of Xolco as a BEE partner except to identify it as synonymous with Keysha Investments 178. The directors thereof were listed as “Hermien Wessels” and “Corporate Law Services”, a company registered in Centurion. Keysha was deregistered in 2009 after failing to submit annual returns and went into hibernation until it was reactivated in 2013, presumably in readiness for the second attempt to secure mining rights. That floundered too, as the film The Shore Break shows, and there was no activity reported on Keysha Investments 176 until last month when on 24 June 2016 the CIPR register records that MZWANDILE MAXWELL MARAQANA was added as a director, to accompany “Corporate Law Services”. Corporate Law Services was also a “director” of Xolco and Blue Bantry Investments 255, the BEE partner with MRC in the Tormin Mineral Sands project.

Maraqana’s name also appears as a director of Xolco. He is unknown to the Amadiba residents, but has a name that is rather hard to forget – especially when the recent history of mining disasters is remembered.

Maxwell Boqwana claims to have no further interest in either Xolco or Keysha Investments 178, but remains a shareholder with Zamile Qunya and Mark Caruso in Blue Bantry Investments 255. So when he is not at his desk as CEO of the Thabo Mbeki Foundation, or overseeing things as President of the National Association of Democratic Lawyers, he is doing business with Mark Caruso and Zamile Qunya to make money for himself from the Tormin mineral sands venture.

Read also: Clarke: Message to MRC shareholders. Xolobeni mining: Blood titanium.

Significantly the Executive Chair of MRC Mark Caruso chose not to put his name or personal contact details on the company announcement so “the Company” (a legal fiction in law) made the decision “after extensive consultation with Keysha” (also a legal fiction). All we know about that ‘person’ is that it is directed by Chief Maraqana, and that he also happens to be a director of Xolco.

Were his fellow Xolco directors party to the decision? According to CIPR records they are listed as Lunga Baleni, the chief of Amadiba and his uncle Khalaphile Baleni, Mary Monica Xolokazi Baleni, Mavis Bongani Denge, Nocedo Lucy Denge, Mziwakhe Dlamini, Eugenia Zodwa Langazana, Christopher Sandi Ngcwele, Johnson Ngundze and Sizwe Shezi.

The names of Maxwell Boqwana, Zamile Qunya and his younger brother Zamokwake do appear on the CIPR registers but as “Resigned Directors”.

But that does not mean they are not shareholders. Private companies have no legal obligation to reveal who their shareholders are.

Most of the residents named either as current or resigned directors were once opposed to the mining venture. Several were benefiting from the once flourishing eco-tourism initiative. So when MRC states it “has committed several significant financial, technical and social resources toward the development of the Xolobeni Mineral Sands Project since 2003”, it should be understood to mean “a ruthless co-option and subversion strategy has been followed to undermine the once thriving eco-tourism initiative”.

Heart breaking stuff.

Having sown a wind, when the whirlwind of violence and murder suddenly blew back at MRC, they did what all profit obsessed companies do, and sold out. Pressure on their major investor, Graham Edwards undoubtedly helped convince MRC directors.

So while it is huge cause for celebration that the shareholder activism campaign has worked, the consequence of MRC’s disinvestment is that we no longer have the information that they were obliged to report as a listed public company on the Australian Securities Exchange.   We do not know who the real shareholders are of Keysha Investments 176, other than someone loyal to a man that President Jacob Zuma has been trying since 2010 to install as King of AmaMpondo, so far without success.

Read also: Mining Minister Zwane argues Rhadebe murder shouldn’t stop titanium mine

Three of President Zuma’s appointees the deputy minister of Minerals Mr Godfrey Olifant and the deputy minister of Police Ms Maggie Sotyu and the Deputy Minister of Water and Sanitation Ms. Pamela Tshwete are scheduled to visit the Xolobeni area today. The claimant king Zanuzuko will be there too and is down to deliver the keynote address. Presumably his proxy Chief Maraqana, will be alongside him to be introduced as the new face of the Xolobeni mining ambitions.

The people who have been the victims of the pro-mining violence, the coastal residents whose homesteads will be demolished to make way for the mining, were certainly never consulted by MRC before their announcement.

But why would they? Poor, rural families have always been right at the bottom of the social influence scale.

The exit of MRC from this theatre of conflict is not the beginning of the end. But it is a welcome end of the beginning. Their departure means that things are going to become ever more personal, and unless there is a redoubling of international media monitoring and decisive action by the police and prosecution to re-establish the rule of law, the killing and intimidation will only escalate.

  • John GI Clarke is a social worker and author of “The Promise of Justice: King Justice Mpondombini Sigcau’s struggle to save the Kingdom of AmaMpondo against unjust developments”

Amadiba Crisis Committee media statement: MRC “disinvests”, but now tell us: WHO IS TRULY BEHIND THE ‘XOLOBENI PROJECT’?

The Australian company Mineral Resource Commodities has announced it is “disinvesting” from the so called Xolobeni project on the Wild Coast. MRC speaks about the violence blocking them. We, the land right holders, have peacefully denied MRC and its “TEM” company access to our land for mining. Who has responded with violence? Who has been shooting at homesteads? Who has repeatedly used bush knifes and knobkerries against locals and even against journalists? Amadiba chief Lunga Baleni, made director of TEM in September, threatened our Headwoman and elders to “enter by force” to drill on our land 22 February. TEM had to give up that plan again. This was one month before the assassination of ACC chair Bazooka Radebe. He led the successful mobilisation that day.

Friends of the Amadiba community in Perth, London and Cape Town marched and picketed in solidarity at the time of MRC’s Annual General Meeting in May. The community got support from solidarity petitions from 108 countries after the murder of our Bazooka. For this we are for ever deeply grateful.

But today we are deeply concerned. Who will provide MRC hundreds of millions of rand to buy its destructive project? Why is MRC not simply withdrawing and close down “Xolco”, “Keysha” and “TEM”? MRC announces in fact that it is still leading a process towards mining. MRC continues to conspire behind our backs with state institutions like DMR, as well as for funding.

We note that MRC speaks about “South Africans” taking over and about “BEE”. To this we once and for all must say:

For ten years we have said No to mining, whatever its colour it takes. It does not matter even if you bring your “Blacks”. Our land is not for sale! We want to develop our agriculture and tourism. Your mining is not development. It is destruction of our land. It is killings and violence, no matter if it is black or white.

We demand that the financial statements of XOLCO, TEM and Blue Bantry are made public. Who are their true shareholders? Who owns the anonymous “Corporate Law Services” involved in all these dark companies and in “Keysha”?

The “Xolobeni project” should not be sold to anyone. It is a worth-less project and must be closed. Instead we fear: state funds are now about to be used to fill the coffers of the corrupt and violent MRC. And the same people remain in the shadows.

We tell them: We will celebrate the day when you lose your blood money. That is the day when it is declared that there will be no mining on the Wild Coast and real development can start.

MRC media statement: Withdrawal of Australian mining company MRC welcomed by Xolobeni community; Questions on way forward remain

The Legal Resources Centre (LRC) and Richard Spoor Inc, Attorneys (Spoor Inc) welcome the decision of Mineral Commodities Ltd (MRC) to divest from the Xolobeni Mineral Sands Project; announced on the Australian Securities Exchange today.

The LRC and Spoor Inc represent the Amadiba Crisis Committee, the customary leadership of the Umgungundlovu community, and 69 of the 75 households within the proposed area in opposing the mining right application filed in March 2015.

The community’s objection to the mining right application highlighted various defects in MRC’s mining right application.

Fundamentally, the objection noted that MRC had failed to seek the consent of the community in terms of its customary law, and that no mining right application should be granted without such consent being given.

Despite the community’s opposition to the Xolobeni project, MRC has been granted repeated extensions by the Department of Mineral Resources to file crucial environmental documents, without any reference to the community, when its application stood to be dismissed outright.

Concern regarding transaction with Keysha

We note with concern MRC’s announcement that it has entered into a Memorandum of Understanding with Keysha Investments 178 Pty Ltd (Keysha) to divest its interest in Transworld Energy and Resources (SA) Pty Ltd (TEM) in the Xolobeni Project.

We note that the Xolobeni community is only learning of this decision from an announcement on the Australian Securities Exchange, and were not consulted about the decision.

It is unclear whether the Department of Mineral Resources has played a role in facilitating this transaction, or if any public financing through the Industrial Development Corporation or any other entity is involved.

It is manifestly unclear how this transaction will be funded, and what compensation Keysha will be obliged to pay to MRC and/or its subsidiaries in return for MRC’s interest in the Xolobeni project.

We strenuously object to the process, in terms of which this decision has been taken without our clients’ participation, much less consent. We have accordingly written to MRC and its attorneys seeking a copy of the MoU on behalf of our clients.

We note that previous documents filed by MRC’s subsidiary, TEM, have indicated that Keysha was set up by MRC as a wholly owned subsidiary of the Xolobeni Empowerment Company (XolCo), a structure established by MRC.

While XolCo has been described by MRC as a “Black Economic Empowerment (BEE) company representing the Amadiba community at Xolobeni”, our clients have never been consulted regarding XolCo and deny that it represents them:

  • MRC documents have variously asserted that XolCo is owned by fiveor nine community trusts. The community has not been consulted in any of these trusts’ formation and does not know whether any or all of these trusts have been registered.
  • We have seen one trust deed from these community trusts. In terms of this deed the municipality would appoint three Trustees, with prominent mining supporter Zamile Qunya appointing the fourth. This clearly does not ensure community ownership of the Trust’s decisions.
  • While the Trusts are supposed to appoint the directors of XolCo, XolCO currently has eleven directors, all mining supporters, including the iNkosi (Chief) of the Amadiba traditional community, Lunga Baleni. As the Trusts have not had any meetings in the community, it is denied that these directors were appointed by the Trusts.
  • While few details have emerged, XolCo’s purchase of a 26% share in the Xolobeni project was funded, in part, by issuing preference shares in Keysha that entitled MRC, and an entity known only as SGC, to 60% of Keysha’s dividends.
  • We are deeply concerned that the financing of Keysha’s agreement with MRC will be similarly opaque and unfavourable.
  • Keysha has a single director, Mzwandile Maraqana, who is entirely unknown in the community.

It is our clients’ view that XolCo and Keysha were established by MRC to advance its mining interests. They clearly were not established by the community itself, and were established with minimal community consultation.

Indeed, our clients’ view is that mining will not be accepted under any circumstances, much less the uncertain terms reflected in MRC’s announcement.

We are unsure whether the transaction requires the approval of the Department of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act. We have noted that the Deputy Minister of the Department will be in Xolobeni tomorrow and hope that he will clarify this point. If section 11 approval is required, we expect the Department to engage in informed consultation with our clients, before making its decision.

We therefore reiterate our clients’ call that the application be dismissed by the Department of Mineral Resources immediately.

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