Eastplats in breach of mining rights, new board warns

JOHANNESBURG (miningweekly.com) – Dual-listed Eastern Platinum’s (Eastplats’) new board has warned the company is in breach of the provisions of all of its mining rights, as well as certain provisions of the Mineral and Petroleum Resources Development Act (MPRDA), owing to the buy-out of black economic empowerment (BEE) minority interests by the previous board.

Dissident shareholder Ka An Development last month succeeded in getting the entire former Eastplats board replaced with new directors. Financial services veteran George Dorin was elected chairperson, while Diana Hu has since been appointed CEO.

The new board on Tuesday said the Department of Mineral Resources (DMR) may formally order the company to rectify this noncompliance or Eastplats risks having its mining rights cancelled under Section 47 of the MPRDA.

Eastplats on Tuesday revealed it had met with the DMR and was working proactively to introduce another BEE partner into the company’s activities.

The new management will also continue to review transactions entered into by the former management, including the proposed sale of Eastplats’ Barplats Mines, which holds the Crocodile River mine (CRM), to Hebei Zhongheng Tianda Platinum (HZT), the BEE buyout agreement, the payment to certain minority interest holders and all related transactions conducted by the former management.

The new board stated that the proposed sale of Eastplats’ Barplats Mines and the related buyout of the BEE partners’ minority interest in the company’s South African assets by the former management, had dramatically changed the company’s strategic footprint in the area.

In June, the company’s previous management entered into an agreement to sell Barplats Mines and associated intercorporate investments and loans to HZT for $50-million.

Previous management had also reached an agreement with certain holders of minority interests in all of Eastplats' projects, including CRM, for $13.37-million.

Shareholder approval for these transactions has not been obtained and the new management of Eastplats says it will continue to investigate these transactions.