Govt, mineral explorer bout goes to the wire
Mbongeni Mguni | Friday May 30, 2014 16:20
The two parties have tussled since May 13, 2013 when Mount Burgess learnt that the Ministry of Minerals, Energy and Water Resources had rejected its application for renewal of a prospecting licence for an area in Ngamiland potentially holding 33 million tonnes in zinc and silver.
This week, Mount Burgess directors announced that notice had been filed with the Court of Appeal in the matter.
“This is to confirm that Mount Burgess has lodged a Notice of Appeal in the Appeal Court of Botswana,” directors said.
“Upon receiving advice of a date for the hearing of the appeal, the company will advise the market accordingly.”
Attorney General’s Chambers officials, who procedurally should be served with the Notice of Appeal, said they were still awaiting official notification.
The latest developments around Prospecting Licence 69 of 2003, which lies along the border with Namibia, about 700km north-west of Gaborone and 350km from Maun, trace back to semi-amicable overtures made to the Office of the Vice President, after the May 2013 rejection.
According to Minerals Minister, Kitso Mokaila, Mount Burgess diverted from the approved prospecting programme, failed to conduct a feasibility study and had already exhausted their two permissible renewals of two years each at the time of rejection.
Mount Burgess – led by Nigel Forrester, a three-decade exploration veteran and original company shareholder – argued that the country’s power crisis meant key milestones could not be met. The Australian company, which first listed in 1985, argued that it had advised government on its challenges throughout the years.
Mount Burgess appealed the rejection to Ponatshego Kedikilwe, who procedurally referred them back to Mokaila, who, on July 9, 2013, booted out the plea. With the tactical route blocked, Forrester and his board approved a legal challenge to the rejection, serving the Attorney General’s office on October 11, 2013 and preparing for bruising arguments in the High Court.
However, the next month – and before the case could be heard in the High Court – the Attorney General’s chambers fired back, charging that Mount Burgess had not cited the correct respondent in its lawsuit.
“The Applicant has not cited the person who made the decision and the Attorney General does not have authority to make decisions regarding mining licences,” government’s lawyers argued.
Mount Burgess’ legal counsel, countered, saying case history dictated that the Attorney General be cited in all applications against government.
As it turned out, the Attorney General won the High Court round of the bout, with a ruling on April 28, 2014 that Mount Burgess’ case be struck out with costs as the decision maker, Mokaila, was not joined in the proceedings.
“In this case, the applicant wants the Minister to issue in its favour a prospecting licence but has not joined the Minister in these proceedings. It was necessary for the Applicant to have joined the relevant licencing authority and not just the Attorney General,” the High Court ruled.
Explorers, investors and other market participants will be keenly eyeing the upcoming Court of Appeal hearing, which will mark one of the few times a mineral dispute pitting an explorer against government, has landed in the highest court.
Mining experts say over the years, at least 10 firms including De Beers have been granted exploration extensions above the two permissible renewals.
On the other hand, a few, including CIC Energy, have also lost their prospecting licences for various reasons, including failure to justify an extension beyond the two permissible renewals.
In 2011, CIC Energy, wrote off a P28.9 million investment it had spent over five years in exploring and eventually proving a 300 million tonne coal resource at its former Mmamabula South licence.Mount Burgess will soon find out whether the 16.2 million Australian Dollars (P123 million) it has spent in Ngamiland since 2003 will all have been for nought.