JOHANNESBURG – A high-stakes battle for control of a valuable gemstone deposit in the Northern Cape has pitted a company co-owned by mining magnate Patrice Motsepe against a smaller mining concern, PP Gemstones Mining & Exporting.
The dispute, which has drawn in the South African Revenue Service (Sars), the police, and the Department of Mineral Resources and Energy (DMRE), centres around the illicit export of sugilite, a rare and valuable gemstone.
The saga began in February when information reached authorities that sugilite, a by-product of manganese mining, was being smuggled out of the country through OR Tambo International Airport.
The gemstone, which is highly prized in Asia, was allegedly being exported by an Asian man named Chang Chinfu, who claimed to have sourced the stones from Assmang's Blackrock Mine in Kuruman.
Assmang, a joint venture between Motsepe's African Rainbow Minerals (ARM) and Assore, holds a mining licence for manganese ore but does not have a licence to mine or trade in sugilite. Chinfu, in an affidavit deposed on May 10, stated that he had "multiple times exported and attempted to export the sugilite gemstones, blue and purple, using Air Menzies International Freight Forwarding Services and other freight forwarding services."
He further claimed that he "received and transacted" the sugilite from the "management" of Blackrock Mine. However, Chinfu claimed that he was unaware of the requirement for a mining and export licence to engage in gemstone transactions, stating that "Blackrock Mine management told me that it is not a requirement."
Sars, acting on a tip-off from whistleblowers, intercepted several shipments of sugilite, worth an estimated R700-million, from multiple exporters, including Chinfu. The shipments were seized as the exporters were unable to produce either an export licence or permit.
The seizure of the gemstones sparked a legal battle, with PP Gemstones, the rightful owner of the sugilite mining rights, claiming ownership of the confiscated goods. PP Gemstones, which holds three mining permits for gemstones in Kuruman, including sugilite, has argued that they have the exclusive right to mine the gemstones in the area.
"From the facts, our client is the only party that has a legitimate claim to the detained goods as the goods are coming from the mining area wherein it has the exclusive right to mine the gemstones," lawyers for PP Gemstones told Sars.
Meanwhile, Assmang, through a spokesperson, has denied any involvement in the illicit export of sugilite. The company has stated that its policy is to fully comply with all South African laws and to cooperate with the police in any investigations.
"Assmang will also initiate its own internal investigations and will report in due course when the investigations have been concluded," the spokesperson said.
The dispute has also raised questions about the role of the DMRE, which granted PP Gemstones the mining permits. Assmang appealed the decision to grant the permits, but the appeal was dismissed by the DMRE director general, Jacob Mbele, who argued that Assmang should have applied for the necessary permits if they wished to mine sugilite.
The case has been further complicated by the involvement of Bidvest Security Company, which was contracted by Assmang to search and detain any miners and workers found in possession of sugilite gemstones. A security guard for Bidvest, Tebogo Freddie Selaledi, stated in an affidavit that the management received sugilite gemstones found on 38 workers as evidence.
The dispute has now been returned to the government by the high court, which ordered Assmang to cooperate with the process. The court also found that the DMRE's regional manager, upon learning of Assmang's denial of consultation during the environmental authorisation process, ought to have conducted a thorough investigation into the allegations.
