Wescoal fights new call for liquidation

Coal mining company’s chief executive says BSM Mining court bid to liquidate company over alleged nonpayment is ‘malicious’

Monday, October31, 2011

Wescoal Holdings will bring an urgent interdict this week to stop what CEO Andre Boje called a "malicious" application to liquidate the coal-mining company in a fresh bout of bad news for the company, which was involved in a bitter battle with a disgruntled contractor earlier this year.

Wescoal is drawing up papers to sue privately owned Sutha Civils, which tried unsuccessfully to liquidate the JSE-listed company and which made a number of allegations against Wescoal and its operations in Mpumalanga that were strongly denied by the company’s management.

The allegations hit Wescoal’s share price hard around March this year.

Sutha Civils said it was owed money and Wescoal said the contract had not fulfilled its contractual obligations.

Now privately owned BSM Mining has lodged papers with the North Gauteng High Court in Pretoria asking for Wescoal’s subsidiary, Wescoal Mining, to be placed under final or provisional winding-up, over alleged nonpayment of royalties worth R84146 to BSM due by October 15.

Boy Simon Mdau, the sole owner and MD of BSM, said in papers lodged on October 27 that Wescoal directors had informed him on October 14 and 19 that he had an unregistered VAT number. Wescoal withheld payments until it had a valid copy of a VAT registration certificate.

Mr Mdau said he had a certificate and included it in his application. "It is my submission that this is a delaying tactic by the respondent (Wescoal) to delay payment as it is not able to make payment to the applicant (BSM)," he said in his application.

Mr Mdau also raised doubts in his submission about Wescoal’s ability to fund a rehabilitation liability at the Heuvelfontein property, which makes up the Khanyisa mine, estimated by him to be R42m.

Mr Boje rejected all Mr Mdau’s claims and said Wescoal’s lawyers were instructed at the weekend to prepare an urgent interdict that would be brought this week to stop BSM’s application.

"You can see the malicious intent here. They gave you (Business Day) the file before they even got a notice of return from the sheriff that we’ve been served with the papers. We don’t even have the papers yet," he said.

"It’s an attempt to embarrass us. We’ll get it interdicted and carry on with our lives.

"I have absolutely no idea where he got that R42m rehabilitation liability. We have to supply the Department of Mineral Resources every month with our rehabilitation figures.

"We have it surveyed every month and it’s between R2m and R8m because we rehabilitate as we go," he said.

Wescoal has submitted an application to the department to transfer the mining rights over the Khanyisa property to Wescoal, invoking a clause in the contract BSM had with NuCoal Mining.

(sourced BusinessDay)

Wescoal to sue over R15m claim

Swart unable to comment because of interdict that prevents him from talking about various aspects of Wescoal matter
Aug05, 2011
By Allan Seccombe

WESCOAL Holdings has had legal papers drawn up to sue Sutha Civils for damages the coal mining company suffered during a battle between the two groups stemming from a dispute over a payment of R15m, Wescoal CEO Andre Bojé said yesterday.

JSE-listed Wescoal won an application in court to overturn a liquidation application brought against its subsidiary Wescoal Mining by Sutha and the listed coal producer was awarded a "punitive costs order" against Sutha, he said.

Wescoal yesterday ended 3c lower at 72c on the JSE.

The matter flared up in a public brawl in March when Sutha levelled allegations against Wescoal that were strongly denied by Mr Bojé.

Sutha claimed that it was owed R15m by Wescoal. It was these allegations that drove down Wescoal’s share price and it is on this basis that Wescoal is preparing legal action against Sutha, its CEO Nico Swart and Sutha consultant Wimpie Badenhorst.

"These court orders bring to an end the madness of the Sutha matter and Wescoal will be pursuing a substantial damages claim against Sutha, Mr Swart and Mr Badenhorst for their destruction of value and the harm they have brought on Wescoal and its shareholders," Mr Bojé said.

During the process to obtain an interdict against Sutha to prevent it from making further public pronouncements against Wescoal the court suggested the listed company seek damages against Sutha, he said.

"The punitive costs order is a clear indication that the court has a dim view of their approach and reinforces the judgment handed down in the South Gauteng High Court last week that the Sutha actions were malicious, groundless, unsubstantiated and devoid of truth," said Mr Bojé.

Mr Swart said he was unable to comment because of an interdict granted to Wescoal to prevent him from talking about various aspects of Wescoal.

(sourced Business Day)

Wescoal and contractor trade blame

Sutha Civils lays fraud charge against Wescoal, threatens to launch liquidation process.

Mar15,2011 07:16:15 AM
By Allan Seccombe, Business Day

IN THE matter of Wescoal versus its contractor, Sutha Civils, both parties are at opposite poles, with Sutha laying a complaint with the police against the JSE-listed coal producer’s subsidiary, Wescoal Mining, which denies any wrongdoing and blames the action on "malicious intent".

Sutha will today file a liquidation process in the South Gauteng High Court, said Sutha CEO Nico Swart, who says he will meet members of the Commercial Crimes Unit to flesh out his allegations and give documentary proof. Mr Swart is clear about the root of his allegation made against Wescoal and its Khanyisa colliery. "There is no coal," he said yesterday .

He said Sutha was contracted to do open-cast mining at Khanyisa and were given co-ordinates by the mine’s geologist. However, when the site was opened, the targeted coal was not there, he said.

"This is not my problem if there is no coal," he said. "The tonnages mined from the box cuts are not what they told investors.

"I have my documents, contracts and drawings showing where places were opened up, but there was no coal. I can show these to investors, the police. I can show the coal is not there."

Wescoal Holdings CEO Andre Boje dismissed the claim with unusual bluntness. "I categorically deny that claim. Furthermore, I’m not going to debate with these hooligans in the media. They are making unfounded and scary allegations."

Wescoal and its lawyers had yet to see the documentary proof Mr Swart claimed to have, Mr Boje said. "Among a number of unsubstantiated claims, Sutha has now accused Wescoal of overstating tonnages mined at Khanyisa. We categorically deny this. We are a company with integrity and ethical principles and in this case, a target of malicious intent."

Wescoal’s counterallegation is that Sutha was mining outside the area in some cases.

Wescoal shares fell to 91c yesterday before staging a recovery to end back at Friday’s price of 99c.

Wescoal told the market via a release on Sens that it had begun its first investigation into irregularities in the Sutha contract within five months of Sutha being hired to mine the west pit at Khanyisa.

"No meaningful explanations were forthcoming from Sutha and the situation was exacerbated, until December 2010 when Wescoal removed Sutha from the Khanysia property and operation in entirety," the Sens statement said.

Mr Swart said there may be a second party to the liquidation proceedings. Mr Boje said he was aware of no other claims against Wescoal.

Khanyisa is the first operating mine in the group and marked its shift from being a coal trading firm to an integrated producer. It is an open-cast mine near Kendal in Mp umalanga and has an estimated reserve of 2,7-million tons.

In April to September last year , Khanyisa produced 887000 tons of coal, of which 546000 tons was supplied to Eskom. Wescoal said that the mine should reach its stated target of 1,2-million tons of run-of-mine coal by the financial year-end on March 31, and it is forecast to have supplied Eskom with 900000 tons in the same period.

Anglo Says Most South Africa Coal Assets Work to Plan Amid Rain

January 28, 2011,
By Carli Lourens,(Bloomberg)

Anglo American Plc said “most” of its South African steam coal operations delivered to plan in recent weeks as heavy rains pummel the country.
“Despite the challenges posed by rain, our Thermal Coal operations have performed well with most of them delivering according to plan,” London-based Anglo American’s local unit said in an e-mailed response to a query.

Heavy rain since December in South African derailed trains, flooded crops and added to coal producers’ problems in Australia, where floods have shut mines in Queensland. South Africa declared 28 municipalities across seven of its nine provinces disaster areas last week.
Wescoal Holdings Ltd. said two of its coal pits in South Africa’s main producing region, Mpumalanga, flooded and it may lose about a quarter of a year’s output. Rockwell Diamonds Inc. lost five days’ worth of gem production due to flooding at its operations north of Kimberley, where three-quarters of the normal annual rainfall was recorded in the past six days, the Vancouver-based company said in a statement today.

Rains may persist into June, the South African Weather Service said Jan. 26. In the first 10 days of January, most of South Africa received more than double its normal rainfall, according to a map on the service’s website.

Optimum Coal Holdings Ltd. said last week its opencast mines were affected by excessive rain and First Uranium Corp. said yesterday some of its pump stations had flooded.
In Mozambique, on South Africa’s northern border, about 12,000 people were displaced by flooding, state-controlled Radio Mozambique reported, citing Joao Ribeiro, director of the national disaster institute.(sourced:bloomberg)