ASX:MRC Financial Status
By ROBERT LAING (September 2008)
THE Australian company given rights to strip-mine along the Wild Coast has reported heavy financial losses, and is facing legal battles that may cost it even more.
Mineral Commodities, whose chairman is Joseph Caruso, 61, and managing director Mark Caruso, 45, posted a R48million loss last year.
The Perth-based miner’s future hinges on two South African projects: the controversial Xolobeni on the Wild Coast and Tormin on the West Coast.
These it hopes to finance from its 5.7 percent stake in London AIM- listed Allied Gold, which operates mines in Papua New Guinea.
The latest facts emerging about the company have increased criticism that the Department of Minerals and Energy did not check the company’s financial standing thoroughly enough when it awarded the licence to mine in an environmental hot-spot .
Apart from the financial check, the Department of Environment and Tourism (Deat) concluded its report on the environmental impact assessment (EIA) with: “The department has grave concerns with regard to the proposed mining developments in the area and objects to it.
“Several crucial aspects and specialist studies are lacking. From the documentation submitted, it is clear that the accepted and adopted planning and policy guidelines for the area have not been taken into consideration and several of the legislative requirements have not been met.
“No time frames or schedules are included to indicate whether they will be adhered to.
“Deat has not received the application for the listed activities in terms of the EIA regulations under the National Environmental Management Act.
“This alone is an almost fatal flaw in the public process to be followed.”
In addition to the Deat’s rejection of the EIA , the SA Human Rights Commission alleged that the required community support for the controversial project had been obtained “Mafia-style”.
Furthermore, far from representing the community, the Caruso family’s black economic empowerment partners appear to consist mainly of brothers Zamile and Bashin Qunya, who happen to be Mineral Commodities employees.