ANC linked company in Sishen rights grab - FF+

Jaco Mulder questions how Imperial Crown Trading 269 got the rights to share in Kumba Iron-Ore mine


"The FF Plus has with displeasure taken note of the ANC government's uninterrupted power abuse by controversially becoming involved in free market ventures," Mr. Jaco Mulder, the FF Plus' chief spokesperson on Trade and Industry says.

This follows the announcement by the Minister of Minerals that Imperial Crown Trading 269 had become the third party which had obtained prospecting rights for iron ore at Kumba Iron's mine in Sishen (see report). Mr. Andrew Hendricks, the husband of former minister for Mineral and Energy Affairs, Ms. Lindiwe Hendricks is included in the Board of Imperial Crown. Other directors include Monica Ripepi, whose business it is to establish and trade with shelf companies, Mbelindile Luhlabo and Prudence Zerah Mtshali. Mtshali formerly held an administrative position at Luthuli House and also serves and the board of a number of private companies. She was also in the news in 2009 following an alleged romantic involvement with deputy president Kgalema Mothlanthe, which was denied by him at the time.

The department awarded the mining rights to the previous holder of the rights, Arcelor Mittal SA, who had neglected to meet the requirement of submitting an application to have an old order right changed into a new order mining right, as required by the Development of Mineral and Petroleum Resources Act. In terms of this act, the right reverted to the government as guardian of South African mineral rights.

Arcelor Mittal SA paid R2.8 billion for a 21.4 percent share in the Sishen mine. The Sishen Iron Ore Company acted as mining contract company for Arcelor Mittal SA while Kumba owned the remaining 78.6% of the company.

In this process, the South African free market landscape is changed into a de facto communist economic system where ineffective and ill-informed central decision making causes competitiveness to diminish. It could subsequently result in South Africa becoming a failed state where real income i.e. that which one could purchase with money, will be of a lesser value than it had been in 1937, just like it was in Russia.

"Just like the involvement of the ANC in Chancellor House and Eskom had drastically increased tariffs with more than 200% since 2004 and the country has been left without sufficient power for the next 15 years, as well as becoming a country without one single effectively functioning municipality, the ANC's interference in Sishen will eventually also mean the death knell for the relevant industry in South Africa," Mulder said.

The involvement of the ANC in a management capacity in any form of business in South Africa leads to extremely negative consequences for investors, service delivery, the public and eventually the non-delivery of goods and service.

According to Mulder, the ANC is trying to repeat the communist experiment of Russia which had over a period of 70 years since 1917, failed spectacularly and which left Russia in a poorer state than what it had been before 1937. The ANC merely does not have the management capability to manage themselves as individuals and also smaller institutions such as municipalities.

ANC involvement in the free market is doomed from the beginning as the ANC does not have the capability to ensure that profiteering and the systematic management of a business can be successful.

The FF Plus predicts the end of yet another big South African industry due to the type of interference of the ANC in the free-market system.

Investors should reconsider their investments in this industry.

Statement issued by Mr. Jaco Mulder, FF Plus Spokesperson: Trade and Industry, March 19 2010

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