CoA removes silver lining from Mt Burgess� cloud
Mbongeni Mguni | Friday July 31, 2015 14:10
Miners dread suits. In fact, during their unguarded moments, some may reveal that the fear of wearing suits is what led them to mining. Spending days under the searing heat and those restless, starry nights, deep in the bush, either mining or searching for minerals, provides an escape from the ‘three piece cage’.
Suits represent the opposite of the spirit of adventure and adventurism, the opposite of ‘dirt under the nails’ and the opposite of the pioneering spirit of endeavour miners are renowned for.
There is another reason miners abhor suits.
After 12 years of effort, the memory of lawyers in sharp suits remains etched in the minds of miners at Discovery Metals’ Boseto Mine, as the project shutdown and entered liquidation last month.
Yesterday, sharp suits presided over the death of yet another mining dream in western Botswana, as a bench of Court of Appeal judges ruled against Australian company, Mount Burgess’ efforts to retain a 28 million zinc and silver project in Ngamiland.
Led by Nigel Forrester – a three-decade exploration veteran and original company shareholder – Mount Burgess is no stranger to minerals, having listed in Australia in 1985.
Like fellow Aussie firm Discovery Metals, Mount Burgess arrived in Botswana 12 years ago in 2003, securing prospecting licence number PL69/2003 in western Ngamiland, on the border with Namibia.
Forrester and his investors pumped 15.7 million Australian Dollars (P115 million) from 2003 on studies and other activities aimed at proving the mineral resource and preparing for commercial operations.
The company’s first licence expired in 2006, whereupon it was renewed for another two years. The licence would be renewed again in 2008 and again in 2010, with the last extension leading to June 30, 2012.
During this period, Forrester said the company struggled with developing a feasibility plan due to the unavailability of power at the site.
“Whilst attending the Africa DownUnder conference in Perth, Australia, the then Minister of Minerals, Energy and Water Resources, Charles Tibone, attended a supper hosted by Mount Burgess,” Forrester told this reporter in an email sent after the company’s loss at the High Court in April 2014.
“He advised that through the intended upgrade of power, sufficient grid power for the Kihabe project should be available at Nokaneng by 2011.”
According to Forrester, Botswana Power Corporation executives and officials, on subsequent occasions, assured the Australian company that grid power would reach the remote project by 2011.
“(Then MEWR minister) Ponatshego Kedikilwe visited the Kihabe project site in January 2010 and asked me what would be needed to develop the Kihabe project into a mining operation.
“I advised that it would need grid power and an upgrade of the access road.”
On May 13, 2013, the new MEWR minister, Kitso Mokaila rejected Mount Burgess’ application for an extension of its prospecting licence, citing the non-completion of a feasibility study. Mokaila added that whatever troubles Mount Burgess had in producing the study, they had no right to amend the “agreed upon prospecting programme without the Minister’s approval”.
Prospecting programmes are agreed upon at each renewal of a prospecting licence.
Mount Burgess’ contended that it could not produce a feasibility study as required by government, as no power was available at the sites. Under an Australian Securities Exchange mandatory code, a feasibility study cannot be said to have been conducted if the availability of electricity cannot be demonstrated.
Mokaila was unmoved, however.
“Any holder of a mineral concession under the Mines and Minerals Act is required to comply with the relevant sections irrespective of the company’s international reporting requirement,” he wrote back.
“(The) prospecting licence has already exhausted two permissible renewals.”
From that point on, the miners in Ngamiland traded their casual shirts and khaki trousers for the dreaded suits, as a battle ensued over the future of the project.
Miners hate suits. Five of the eight member exploration team in Botswana was rendered unemployed while a senior field geologist opted to remain on half salary within months of the legal impasse setting in.
A futile appeal was made to then Vice President, Ponatshego Kedikilwe and Mount Burgess also weighed its options of reporting Botswana to SADC for violating the regional group’s investor protection protocols. On July 26, 2013 the company indicated it was headed to the High Court, from where Judge Michael Leburu booted out the challenge citing matters of law on April 28, 2014.
An appeal was filed with the Court of Appeal and yesterday Judge President, Ian Kirby, comprehensively dismissed the four grounds of appeal Mount Burgess’ had filed. With sharp suits in attendance, Kirby read out the last rites for the zinc and silver project at 09:40am yesterday morning, in a 26-page judgment.
Kirby’s judgement shows that Mount Burgess’s appeal failed on matters of law and procedure and not the actual merits. The Australian company cited the wrong respondent in their suit and were also time-barred from filing their opposition to Mokaila’s May 2013 rejection.
“The subsequent approach to the Vice President was no more than a request for political intervention and was not part of the legal process. The review was filed on October 9, 2013, some six months later.
“This was irregular as no prior leave of the Court had been sought.
“(This) ground of appeal must fail.”
In one fell swoop and in under half an hour, the Court of Appeal had resolved a 24 month legal battle, leaving government victorious and Mount Burgess’ future uncertain for the time being.
In its long history, the Australian company has had projects in Australia and Namibia, but at present, the zinc and silver below the Ngamiland sands was its only asset. With Kirby’s judgement, Forrester will need to dig deep into his 30 years of mineral endeavour to keep his shareholders on board and map out a way forward.
He will take guidance from the sliver of light Kirby provided in the last paragraph of his judgment.
“It remains open to the appellant, should it be so advised, to start afresh by seeking leave to bring late review proceedings and if successful, to launch its review afresh complying with all the requirements of the rules. “Only then would the merits of its application fall to be considered.”
Ever so slightly, a door has been left ajar for the suits.