Mining company not sure where to send royalties

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Families of Lonmin's Marikana mineworkers killed in clashes with police will conduct cleansing ceremonies on Monday.

BRITS – The Sky Chrome mining company says its has struggled for almost two years to confirm the banking details of a trust account in which it is meant to deposit mining royalties for community development. This was among the revelations at public hearings of the North West Provincial Standing Committee on Public Accounts, aimed at finding out whether money has been looted from the account, known as the D-Account.

Since 2009, more than R380-million has flowed out of the account. The committee had requested mining companies appear before it in order to help clarify how much was paid over the years, starting as far back as 1970. Sky Chrome was one of four companies which appeared this week. Lonmin and Samancor Chrome also appeared before the committee, with Lonmin reporting having deposited almost R373-million into the D-Account since 1970. Samancor deposited R5-million between 1994 and 2010, the company said.

The company is a subsidiary of International Ferrro Metals (IFM) Limited, which also mines in the area but not on Bapo ba Mogale community land. In a presentation Sky Chrome said it had resorted to opening an interest bearing trust account in which it deposited the royalties from the beginning of its mining operations in July 2011.

This was because government failed to give the correct account details, the company said.

“As early as in December 2011 already, SCM (Sky Chrome Mining) started making enquiries about the detail of the Bapo ba Mogale D-Account in order to make payments of the royalties owing to the Bapo ba Mogole Traditional Community…In October 2010, we took up direct contact with the Department of Rural Development and Land Reform,” said IFM chief executive Chris Jordaan said in a letter to the committee.

The company produced a letter dated 22 July, in which the provincial rural development minister refers the company to the department of Local Government and Traditional Affairs. In the meantime, community royalties of more than R8.4-million are being kept in a separate trust account administered by Webber Wentzel attorneys.

The controversy around the account relates to the apparent poverty in the Bapong area, which is surrounded by platinum and chrome mines. Since 2009, the provincial government has administered the account and in that time hundreds of millions have been paid out of the account. In June the committee heard that just over R100-million remained in the account, but the provincial Treasury did not have documents detailing transactions from the account. 

Complicating matters further, the account has not been audited in 19 years. The committee is expected to resume public hearings next week, when it will ask representatives from the Department of Local Government and Traditional Affairs, along with provincial Treasury.