Business

Lurco vows to fight to acquire the formerly Gupta-owned Koornfontein mine

2019-12-13 15:10

Junior mining company Lurco has vowed to fight to acquire the formerly Gupta-owned Koornfontein mine after it lost the opportunity because it could not produce its promised bid money on time.

The company, however, has still not managed to bring the funds into the country.

At a press conference earlier this week, chief executive and founder Ellington Nxumalo reiterated that the company felt they had been hard done by the business rescue practitioners who were in charge of the sale of the Mpumalanga mine.

Lurco won the mine with a R500 million bid but failed to get the money into the country from its foreign investor within the specified time, which a week.

The mine was subsequently offered to the second most preferred bidder, Black Royalty Minerals (BRM) before Lurco approached the courts to have that decision set aside.

Flanked by the company’s chief operations officer Aubrey Chauke, among other executives, Nxumalo confirmed the company still does not have the money in the country but has begun processes to have the money early next year.

Nxumalo also dismissed talk that the company had business relations with the Guptas, the mine’s former owners, and said among the things that made it different from other mining companies was the fact that it avoided working with individual politicians but preferred to work with government.

The company said it had experience in the mining sector and was best suited to own and run the mine. Nxumalo said the company has a beneficiation plant in Mpumalanga called Van Dyks drift, a 51% stake in Inyanda colliery and another coal project in Botswana.

READ: Communities dread third bleak festive season as mine sale halted again

The company also said it the week given to get the money in a South African bank account was too short but opted not to go to court until after the period had lapsed when the mine was offered to BRM.

“We tried to get back to back guarantees from the funders and for the banks to earmark funds here,” said Lee Stokes, the company’s executive for business development and capital raising.

Lurco’s court challenge of the sale has been joined by Oakbay and Westdawn and judgement on the matter was reserved. Lurco’s initial urgent application on the matter failed.

Lurco had initially joined the race alongside state-owned African Exploration Mining and Finance Corporation (AEMFC) which subsequently pulled out.

The two companies have, however, joined forces to try to buy Koornfontein’s neighbouring Optimum mine which is also under business rescue and is set to be sold off next year.

Community organisations neighbouring Koornfontein the mine recently staged a protest at the Johannesburg High Court when Lurco’s application was heard and accused Lurco of delaying the sale of the mine, which has been closed for almost three years.

A previous attempt to sell the mine to Project Halo also failed after the sale was also challenged in court.


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January 26 2020