Wednesday, June 12, 2024

Mining company suggests sabotage by government

A trove of correspondence seen by Sunday Standard suggest that sabotage could be the possible reason why an international mining exploration company which claims its revenue could be greater than that of Debswana was not grated  renewal of its exploration license near the Okavango Delta.

The heated exchange is contained in letters and emails shared between the Minister of Minerals Lefoko Moagi, various government officials and the Managing Director of Tsodilo Resources, James Bruchs. The company through its subsidiary, Gcwihaba has since taken the government to court challenging the decision not to renew its mining licence. 

In a letter dated June 6, 2022 addressed to Moagi and routed through Botswana’s ambassador to the United States Kitso Mokaila Bruchs states that: “Gcwihaba feels that we are now being penalized for following all the laws and regulations in establishing an initial compliant NI 43-101 resource and are on the brink of establishing the Xaudum Iron Formation (XIF) as an economic project potentially equal to or greater in revenue than Debswana.”

He said: “Our activities were performed with the knowledge and encouragement of the government” adding that “However, the State Party’s filings with UNESCO since 2014 clearly show that the declarations in those filings were not consistent with the facts concerning the Gcwihaba licenses.” Further to that, Bruchs said an email correspondence with Stephen Mogotsi, Director Department of National Museum and Monuments, “clearly show that there was or is a concerted effort to obscure the facts with UNESCO by knowingly making inaccurate statements as they relate to Gcwihaba’s licenses.”

“Gcwihaba is being asked to relinquish our license area in the buffer zone which is an important part of our compliant NI 43-101 resource and part of the license which we have held before and after the buffer zone was established in 2014,” said Bruchs.

He said: “… in return for spending $6M USD in this area alone which contains 169MT or a resource with a current in-situ value of $6B USD, we are being offered – nothing.”

Bruchs also revealed that:  “Gcwihaba’s shareholders and stakeholders are being asked to sacrifice itself apparently for errors in disclosure made by others.”

He said when he assumed the CEO position of Tsodilo Resources Ltd. in 2002, at times”…Gcwihaba was always treated as a valued participant in the resource sector as our success was of benefit to the Batswana as it should be.”

However, Bruchs said “this “working through the issues,” seemed to change by September of 2021 as we were renewing our licenses. For some reason, Gcwihaba was now viewed as an adversary instead of a company whose investors had spent years and  millions of USD in discovering what is probably the largest resource in terms of its in-situ value in all of Botswana.”

In another letter dated 15 march 2022, addressed to director of mining, Ofentse Ditsele, Bruchs revealed that “As a public company, we are required to have an annual audit and even though we have filed

extensive briefs, sent emails and requested meetings, I do not have any document from DOM (department of mines)explaining why PL020/2018 has not been renewed.”

He said: “The damages to the company and its investors including the IFC (World Bank), JPMorgan Asset Management, First Quantum, Lucara, Sandstorm Gold and Botswana based TBM and our hundreds of shareholders is real.”

He requested Ditsile “that you provide me with a written response specifically detailing  why PL020/2018, (the licence at the centre of dispute) which contains the company’s major asset, is not being renewed so we can provide your response to our auditors and legal counsel and all parties of interest so that they can read for themselves the reasons why the biggest potential resource development project in Botswana is stalled.”

In another letter, Bruchs said: “have clearly established that we have held the license before and after the  establishment of the OWHP (Okavango World Hretaige Property)  and that the license has either been granted or renewed many times  since 2014.”

He said without any consultation with “ourselves, OWHP was established in 2014 and the buffer zone designed by the State party encroached on our license property.”

He said this act presented no barrier to our activities as it “was clearly stated by the State Party (Botswana) to UNESCO in 2013 and 2014 and to us directly by numerous Ministers, Permanent Secretaries and Deputy Permanent Secretaries over the years that our activities were permitted in the buffer zone.”

Responding to one Bruchs’s proposals, Moagi indicated that “I wish to reiterate my willingness to consider a renewal application as long as the area applied for falls outside the Okavango Delta buffer zone.”

However, Moagi informed Bruchs, “I am not amenable to the conditions attached to your resolution, save for the one that requires that Gcwihaba be given a right of first refusal in the event Government decides to allow exploration or mining within the buffer or core zone anytime in future.”

Moagi added that, “I wish to clarify that Government has no intention of allowing those activities in the Okavango Delta, anytime in future.” In another correspondence dated 26 April 2022, Moagi informed Bruchs that “Kindly note that the coordinates submitted in the application for renewal of prospecting license no. o20/2018 are encroaching into the buffer zone of the Okavango Delta, which is listed as a world heritage site.”

He said: “Prospecting activities are prohibited within the buffer zone of the delta, or if permitted, they are to be subject to stringent environmental assessment measures” adding that “In light of the above, I am not in a position to renew the prospecting licence for as long as the submitted coordinates fall within the buffer zone of a world heritage site.”

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