Namibia: Epangelo Blasts Navachab UK Partners

Mines minister Tom Alweendo has threatened to shut down the Navachab gold mine at Karibib because of a bitter row over its United Kingdom partners' attempts to make quick cash from Namibia's oldest mine.

Navachab gold mine is jointly owned by an entity called QKR Namibia Mineral Holdings (92,5%), and the state-owned Epangelo Mining (7,5%).

Alweendo's threat also partly revolves around an alleged move by the majority shareholder to force two Namibians off the mine's board, in violation of its mining licence.

Namibia's national mining company Epangelo Mining accuses QKR Namibia of having no long-term plans, and of merely wanting to make a quick profit to sell the operation.

Statistics from the Chamber of Mines of Namibia show that the mine realised N$4,7 billion in revenue from 2014 to 2018.

QKR Namibia - which had 409 permanent workers in 2018 - paid N$300 000 in corporate taxes during that time, and N$140 million in royalties.

'SHOTS FIRED'

Epangelo chief executive officer, Eliphas Hawala complained in a letter dated 5 March 2018 that the company was engaging in "selective mining for cash", and had backed away from its promise to inject US$90 million [N$1,2 billion] into the mine as part of an expansion programme.

"Since the acquisition of Navachab Gold Mine, QKR Namibia Mineral Holdings has gradually been eroding the governance system of the company, to the point where the company undermines the role of the board," read Hawala's seven-page letter written to Kulezyk Investments, the majority shareholders in QKR Namibia Mineral Holdings.

He declined to comment on the letter, citing confidentiality.

The UK-based QKR CorpoLimited bought bought the mine five years ago from AngloGold Ashanti Namibia.

Hawala furthermore accused Kulezyk Investments of unilaterally making changes to the composition of the mine's board of directors.

"Epangelo Mining was informed that QKR Namibia Mineral Holdings is planning to remove two directors from the board. This was quite shocking, as this is not based on any non-performance by the said directors," it said.

"The only thing the two directors have in common is the fact that they are from a previously disadvantaged Namibian background, and .. have consistently provided their sound opinions and input without fear or favour, as required for good corporate governance."

A mines ministry source told The Namibian last week that having a minimum of two previously disadvantaged Namibians, in addition to Epangelo Mining's representatives, was one of the conditions of the licence.

The directors facing the boot are Electricity Control Board chief executive Foibe Namene, and Navachab Gold Mine's corporate affairs manager, Chris Movirongo.

Namene and Movirongo declined to comment on the issue.

Epangelo also claims that the mine's managing director, George Botshiwe, does not hold a mine manager's certificate.

WARNING

Alweendo intervened on several occasions to compel Navachab to stick to its promise that the mine will run beyond 2029, or else lose its mining licence.

He wrote to Botshiwe on 17 May this year, threatening to take action if the mine does not revert to its original plan, which, he said, was the basis on which its licence was granted.

"Kindly be informed that your application for the revised mining work programme is not approved. You are, therefore, directed to implement the work programmes that formed the basis on which the mining licences (31 and 180) were renewed or granted," the letter stated.

The minister's letter goes on to say: "Should you not wish to comply with the above directive, please advise so that I can consider applying the provisions of Section 55 of the Minerals (Prospecting and Mining) Act 33 of 1992".

Section 55 empowers the minister to revoke mining licences.

Sources said Alweendo's letter is a follow-up to another in which he requested clarity whether the mine has been scaling down its activities, and operating outside the terms of its licence.

"We now understand that there are uncertainties of sustainable operations, to an extent that there exists the risk of placing the mine on care and maintenance or closure in the next few months," said another letter by Alweendo to Botshiwe, dated 25 January this year.

The minister said he is "concerned about these developments, and request that you urgently provide my office with a comprehensive report outlining what has been carried out over the last six months.

"I also would like to receive a comprehensive and detailed schedule of activities you intend to undertake in the next 12 months in order to achieve your stated objectives with regards to your mining operation on the two mining licences."

The minister appeared to have had a change of heart, and toned down his tough stance when he spoke to The Namibian on Wednesday.

He said the mine and the ministry had now agreed on a revised mining programme for Navachab. "Nothing is cast in stone. Things change, and it requires flexibility," he noted.

The Namibian understands that the relationship started taking a strain early last year when the mining operations began going off script on its operational plan. Correspondence between the mine's two shareholders, seen by The Namibian, indicated that the relationship began creaking as far back as 2016, when the mine allegedly stopped "stripping" - clearing surface soil before mining gets underway.

The move was allegedly not in line with the business plan, which stipulated that two years of intense stripping was required before the mining of gold ore could commence.

Navachab did not respond to questions sent to them last week, despite promises to do so.

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