Mineral minister ordered to renew Gcwihaba licence

Keto Segwai | Monday December 25, 2023 06:00

Justice Maripe further ordered that the renewal should be “subject only to justifiable safeguards necessary for the protection of the heritage area.

Such safeguards are not to include any further demand for reduction or shifting of the license area or its coordination.” The court also ordered that following renewal, the minister must align the effective dates of contiguous licenses PL 021 – 126/ 2018 with that of the renewed license.

The court granted all the orders, save for one, which were sought by Gcwihaba Resources in their notice of motion filed on October 31, 2022.

The notice had also alternatively sought that the minister be ordered to pay damages in the sum of US$65 million (P858.1 million) or any other amount as assessed by the Registrar of the High Court. This has since fallen away in the face of the licence renewal order. According to the court records, Gcwihaba Resources was awarded a prospecting license in 2008 and has been renewed every three years until one of the company’s five licences – PL020/2018 – was rejected for renewal late November 2021. The minister had argued that the prospecting area encroached on the Buffer Zone of the Okavango World Heritage Site.

The ruling noted that the Gcwihaba Resources licence has been held before and after the listing of the delta as a heritage site. At the time of the listing, it transpired that both prospecting and mining activities are permitted in the buffer zone and not in the Core Zone. Secretly, however, the ministry seemingly entertained the idea of having both the buffer and core zones designated as non-prospecting and non-mining areas.

And this without communicating its wishes or intentions to the affected prospecting company. In 2014, Gcwihaba Resources shared information with the ministry on the discovery of 441 million tonnes (Mt) of inferred iron resources in the prospecting area – 20/2018. According to the court records, the government expressed interest in jointly developing the project with Gcwihaba Resources. In 2018, as a follow-up state-owned Mining Development Company Botswana (MDCB) approached Gcwihaba Resources for shareholding – an overture that was graciously welcomed.

Still in 2018, following negotiations with the ministry (Department of Mines), Gcwihaba Resources relinquished their licences on the eastern side of the panhandle – which is located in the core zone. On June 30, 2021 Gcwihaba Resources’ holding company, Tsodilo Resources filed application renewals for five of its seven metal licences; and shedding 50% of its prospecting area. All these on the nudging of the Mines Department, which wanted realignment of the coordinates, ostensibly to be clear off the buffer zone. In late November 2021, four of the five Gcwihaba Resources licences were renewed to be effective January 1, 2022.

However, one critical licence, 020/2018, was the one left out. Yet this is the area the company had identified vast iron resource. In a letter of April 26, 2022 the minister confusingly gives as reasons for rejection the prohibition of prospecting activities in the buffer zone and the possible conditional permission. In that letter, Minister Moagi informed Gcwihaba Resources that: “Kindly note that the coordinates submitted in the application for renewal of prospecting License No. 020/2018 are encroaching into the buffer zone of the Okavango Delta, which is listed as a world heritage site.

Prospecting activities are prohibited within the buffer zone of the Delta, or if permitted, they are to be subjected to stringent Environmental Impact Assessment measures, in accordance with the provisions of the Environmental Assessment Act of 2010 and Environmental Regulations of 2012 for the Department of Environmental Affairs (DEA). In the light of the above, I am not in a position to renew the Prospecting Licenses for as long as the submitted coordinates fall within the buffer zone of a World Heritage Site.” The following day, April 27, 2022 Gcwihaba Resources promptly hit back, noting that “PLO20/2018 has existed in one form or another since 2008 and always in the area currently known as the buffer zone.

Chronologically, the buffer zone encroached on our licence areas as our licence existed six (6) years prior to the buffer zone being established by the State Party in 2014. In fact, a compliant N1 43-101 441Mt resource report was prepared and filed with MMGE prior to the buffer zone and the OKWHP being established. For clarification, only the area known as the core zone is part of the OKWHP and it is defined in and known by as the Property in the UNESCO documentation.” Justice Maripe took issue with the Minister’s inconsistency as exhibited in his answering affidavit, noting that “the Minister’s position is inconsistent and in some cases self-destructing.” “There are two positions stated here. First, that prospecting and mining activities are prohibited within the buffer zone. Second, that if those activities are permitted, they should be subject to strongest environmental protection measures.

These two positions are mutually exclusive of one another and cannot go together. It is either one or the other. “To the extent that the minister talks of the position, and refused the renewal application on the basis that prospecting and mining activities are prohibited in the buffer zone, his decision is bad, and cannot stand since it is based on wrong application of the law and a flawed factual premise. It is for that reason unreasonable and stands to be set aside.” In the heated exchange prior to the court case and as part of their respective affidavits, the two parties made accusations against each other.

The minister accused the prospecting company of dishonesty and fraudulent conduct; while on the other hand the company said the government had not only short-changed it but had also over the years made misrepresentations to the UNESCO on the state of prospecting licenses and activities in the buffer zone. In his answering affidavit, the minister had expressed concern that “the company wants to retain a prospecting license that is not doing any prospecting work on, but rather than the licence is possibly only kept for speculative purposes or raising funds from investors who are not aware of the location of the licence and the implications thereof.” The court noted that the company had argued that the discovery of the identified resource is testimony of the prospecting activities from the use of the licence.

And that the minister had not denied that a discovery was made. Regarding the fundraising drive, the company argued if anything the controversy surrounding its licence renewal had a dampening effect on some potential investors. Justice Maripe ruled: “The allegation of speculation therefore has no basis and it contradicted by the pleadings. To the extent that this is presented as a justification for rejecting the licence, it is an irrational consideration and demonstrates that the decision was made on the basis of improper information.

The decision is on this account tainted.” Regarding the repeated misrepresentations to UNESCO by the government, the court noted that the government lawyer frankly conceded in oral argument that government furnished incorrect information to the agency. “This is not proper exercise of power,” Justice Maripe had concluded.

The minister had also alluded to negative publicity and international pressure should it be realised that prospecting activities are being carried out in the buffer zone. However, Justice Maripe saw this differently. “Since prospecting is not prohibited in the buffer zone, the minister’s decision is based on irrelevant consideration. The international community cannot be expected to complain and revolt over that which is legal. “Similarly, the concerns about international pressure and ostracism, in circumstances where no law prohibits activities in the buffer zone, are matters irrelevant.

They have unduly clouded the minister’s mind to use his powers and the purposes of the Act, and so deprived the application of an opportunity to conduct its activities, which might benefit the State in the long run. The discovery made is a particularly relevant fact, which ought to have been taken into account for its potential to impact government coffers in terms of Part X of the Act.

His decision is for this reason bad and stands to be set aside.” In a statement, Tsodilo Resources chairperson and CEO, James M Bruchs welcomed the ruling as a very important decision for Botswana as it reinforces those values and systems that establish Botswana as one of the best democracies in the world.

“The High Court decision reaffirms the basic tenant that the rule of law does indeed prevail. Since 2014, the Botswana government has publicly expressed its support for the Xaudum Iron Formation (XIF) project, and we look forward to working with the Ministry of Minerals and Energy and the Ministry of Environment and Tourism as we continue our work to bring the XIF into production.”

Gcwihaba Resources project is located in the north western side of Ngamiland and extends for some 40 kilometres. Gcwihaba Resources is a subsidiary of Tsodilo Resources, which is an international resource exploration company engaged in the search for economic metal and diamond deposits. Besides Gcwihaba Resources, Tsodilo Resources wholly owns Bosoto (PTY) Ltd, which holds the BK16 kimberlite project in the Orapa Kimberlite Field in Boteti. Tsodilo Resources manages the exploration of the Gcwihaba and Bosoto projects.