The mining company, Coal of Africa Limited (CoAL) announced on Monday that the Minister of Water and Sanitation, Nomvula Mokonyane, had lifted the suspension on the integrated water-use licence for their open-cast Makhado mining project.
In April 2016, CoAL's initial 20-year licence was suspended after the Vhembe Mineral Resources Forum (VMRF), consisting of concerned citizens, launched an appeal to the Department of Water and Sanitation.
The lifted suspension, however, does not give CoAL the green light to commence with the development of the Makhado Project. Contrary to what CoAL's CEO David Brown said on Monday, the lifting of the suspension of the licence does not complete the suit of regulatory authorisations that was required for the Makhado Project. Brown reportedly told Business Day that the Makhado project now had the necessary mining rights, water licence and environmental authorisation and that management could proceed to start fundraising in the second half of 2017.
According to the VMRF, CoAL forgot to mention that an appeal that was filed against the project's mining right is still pending. The forum's legal representative, Mr Christo Reeders, confirmed on Wednesday that the VMRF had submitted additional supporting objections to their appeal with the Department of Mineral Resources (DMR) in October last year.
In addition, CoAL, which has been struggling to get the necessary permits in place since 2011, has seemingly not taken into consideration that some of the farms that fall under Makhado have been consolidated. In other words, the forum argues, several discrepancies exist in CoAL's description of their property. By the VMRF's calculations a 1 500ha difference exists in the properties that CoAL did not apply for in their original mining-rights licence.
Another concern that the VMRF has is with the fact that CoAL has only commissioned one environmental impact assessment (that did factor in the extra 1 500ha surface area of the mine) to justify their application for the mining rights, water licence and environmental authorisation.
"This whole thing is an absolute mess and to top it off we, as one of the key appellants, had to find out about the suspension's liftment through media reports and not from the minister," said Reeders during a telephonic interview.
The fact that the forum learned about the matter through the media has made it somewhat difficult for them to respond immediately. "Minister Mokonyane has yet to release her reasons for lifting the suspension," explained Reeders.
Only once the forum has had time to consider Mokonyane's reasons will they be able to review their options and formulate a new plan of action. "However, we will definitely continue with our fight," said Reeders.
Regarding funding for Makhado, Brown told Business Day on Tuesday that the last updated estimate of capital costs was $280 million. Management, said Brown, was considering a "Makhado Lite" plan, involving lower capex, a smaller production profile and quicker construction time.
The original plan for Makhado released four years ago was to produce 2.3 million tonnes a year of hard coking coal and 3.2 million tonnes of thermal coal at a steady rate.