Having black empowerment partners called Zuma, at a time of general public revulsion against President Jacob Zuma’s cronyism, has added an additional headache for an Indian company trying to develop a new coal mine near Wakkerstroom in Mpumalanga.
Atha-Africa Ventures’ Yzermyn, a 2.26Mt/year export underground coal mine, will be on a farm within the declared Mabola Protected Environment near Wakkerstroom, an area consisting of wetlands, pans and an endangered grassland ecosystem. It is the source of the Tugela, Vaal and Pongola rivers and is identified as one of SA’s 21 strategic water source areas by the SA National Biodiversity Institute and the Council for Scientific & Industrial Research.
Atha-Africa has secured a mining right, an environmental authorisation and an integrated water-use licence, despite strenuous objections from local landowners, environmental NGOs and the Mpumalanga Tourism & Parks Authority.
Melissa Fourie, executive director of the Centre for Environmental Rights (CER), says only a court challenge by a broad range of civil society organisations and a final decision by the minister of environmental affairs are holding up construction.
If the minister allows this mine to go ahead, it will set a precedent for other mines to proceed in protected areas, she says.
One of Atha-Africa’s BEE partners is the Bashubile Trust, which holds 10%. Bashubile’s members are listed as Sizwe Zuma, Vincent Zuma and Prince Thabo Mpofu.
Atha-Africa senior vice-president Praveer Tripathi says Vincent Zuma and Mpofu are no longer members of the trust. At Atha-Africa’s request, the membership of the trust has been broadened beyond the original three founders.
Sizwe Zuma is referred to as Zuma’s son in media reports on a fuel supply contract awarded by SA Airways. The president’s spokesman, Bongani Ngqulunga, did not respond to e-mails seeking confirmation of the relationship.
Tripathi says an extensive due diligence was done on members of the Bashubile Trust, which had initially advised Atha-Africa in its negotiations with government departments and the community, when it asked to buy into the project. There are more than 200,000 Zumas in SA, all of whom are related.
The CER’s statements suggest it was relatively easy for Atha-Africa to secure the necessary permissions, but Tripathi says that is not the case.
The CER’s Fourie says that after a report commissioned by Atha-Africa’s environmental assessment practitioner, WSP Environmental Partners, raised serious concerns about water contamination and biodiversity loss, the company was replaced by EcoPartners. The CER has established that junior officials of the department of mineral resources recommended that no mining right be granted, but they were overruled by more senior officials.
Tripathi says Atha-Africa’s applications have been closely scrutinised. Some had to be resubmitted to address certain areas, and it has taken several years to get this far.
Atha-Africa is a subsidiary of a 60-year-old family-owned Indian company, Atha Group, whose core business is iron ore mining. More recently the company has expanded into direct-reduced iron production. This is a form of iron beneficiation that requires high-carbon coal, the best source of which is SA. Atha Group bought coal from SA until 2011, when it decided to invest in its own mine.
Yzermyn was originally a BHP Billiton property. It was then owned by an empowerment group, from which Atha-Africa bought it. Atha-Africa extended the original drilling done by Billiton and by 2012 had determined there was a resource of about 100Mt of coal suitable for its requirements.
In March 2013 Atha submitted an application for a mining right on five out of the 10 farms in the prospecting area. Two months later, an intention to declare the Mabola Protected Environment over these farms was gazetted, and the declaration was made in January 2014.
Tripathi says a "protected environment" is a particular category that allows mining with special permission. Initially there was a lot of opposition to the mine from local residents and NGOs, but over time it became apparent there was also a lot of support, particularly from poorer communities who were anxious for jobs and development.
Between 2013 and 2016, Atha-Africa commissioned the necessary social, labour and environmental studies, and held public consultation. Its environmental management plan was rejected several times by the department of environmental affairs and the department of water affairs, and Atha had to make changes to address their objections. After committing to 249 mitigation measures, including limiting the mining area to one farm, dispensing altogether with a washing plant and discard dump, and providing support for the management of the protected area, it eventually secured mining and environmental permissions.
Tripathi says to date the group has spent R33m on this project, excluding the acquisition cost.
There is an issue outstanding, says Tripathi. Because special permission for mining a protected environment is needed — and there is no precedent for it — it was decided after lengthy debate among various government departments that permission would have to be secured from the minister of environmental affairs.
Environmental NGOs have appealed against the environmental authorisation on several technical grounds and against the objectivity of EcoPartners.