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New SA mining right dispute

View from the
concentrator towards
the shafts at Palabora
Phalaborwa, South Africa — MININGREVIEW.COM — 25 November 2010 – Another mining right dispute has emerged in South Africa, with Palabora Mining appealing against the granting of a new mining right to a third party over an area that the copper and magnetite giant is already mining.

In a statement issued here, Palabora said the government had granted an unnamed third party the right to mine copper, magnetite, phosphate apatite and baddeleyite in an area for which Palabora held an old order mining right to mine all base metals except phosphates.

The statement added that the company had submitted its old mining right for conversion into a new right as laid out in the law, which required companies to convert them by a set date or lose them altogether.

“Current mining operations are not affected by this matter,” Palabora said
Earlier this year, Lonmin and Kumba Iron Ore, a unit of Anglo American, said the government had deprived them of mining rights when it awarded prospecting licences “’ some to people linked to high-ranking officials “’ over areas where the two mining giants operated.

Analysts said South Africa’s handling of disputed mineral right awards had damaged the resource-rich country’s reputation and had raised investor concerns over transparency and governance in the key economic sector.

South Africa’s mining ministry revealed earlier this month that the sector was rife with problems, including illegal drilling, rights sold on without permission, and companies having competing claims to the same plot.

The ministry has imposed a six-month halt on new prospecting bids from the start of September in order to overhaul mining laws, iron out irregularities in the way rights are awarded, and audit existing exploration and drilling contracts.