Struggle for Control Over Nkwe Platinum’s Mineral Deposits Intensifies

Struggle for Control Over Nkwe Platinum’s Mineral Deposits Intensifies

Background of the Dispute

The ongoing dispute between Chinese-owned Nkwe Platinum and its empowerment partner Genorah Resources over control of extensive mineral deposits in northeast South Africa remains unresolved. These deposits, estimated at 23 million ounces of platinum, palladium, rhodium, and gold, are located near Anglo American Platinum and African Rainbow Minerals’ Modikwa mine in the Eastern Limb of the Bushveld Complex.

Details of the Contention

The contention centers around the Garatau mine, operated by Nkwe Platinum under the leadership of Gary Fan. A key issue in the dispute is the 2018 amalgamation under Bermudan law of Gold Mountains, a wholly owned subsidiary of the Chinese mining house Zijin, and the original Nkwe to form the new Nkwe. Genorah Resources, which includes Sharif Pandor among its shareholders, contends that this amalgamation, creating the new Nkwe, required ministerial approval for the transfer of the mining right. They argue that their Chinese partners’ failure to seek this approval effectively left Genorah as the sole owner of the mineral rights.

Ownership and Legal Developments

Zijin, largely owned by the Chinese government, acquired a 74% stake in Genorah’s mining right for approximately R300m in 2015, leaving Genorah with the remaining 26%. The conflict escalated recently when an attempt by the Chinese to enforce a Bermudan court’s judgment in South Africa was unsuccessful. The judgment sought to interdict Genorah from engaging with the South African Department of Mineral Resources & Energy, a move acting judge Dingenus van den Bogert ruled as interfering with South African sovereignty.

Impact on Investments and Mine Operations

This dispute casts uncertainty over Nkwe’s pledged R13bn investment at the 2023 SA Investment Conference. The Garatau mine, with a projected life of over 29 years and an anticipated workforce of approximately 2,500 once fully operational, has faced stagnation due to legal and regulatory challenges. Nkwe Platinum spokesperson Sophia Liu declined to comment on the potential impact of the legal issues on capital expenditure, while Genorah was unavailable for comment.

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