CRG mining licence under threat

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Central Rand Gold (CRG), the controversial prospecting and gold mining company, has until the end of business today to provide a presentation to Mineral Resources Minister Susan Shabangu as to why the department should not shut down its operations.

The company was issued with a notice last month in which it was informed of the Department of Mineral Resources’s decision to re-evaluate its mining right as a result of certain elements of “non-compliance” with the social labour plan requirements for its new order mining right.

The junior mining firm, which was established to explore untapped reefs at defunct mines in the south of Johannesburg, has been accused of failing to deliver on its promises to communities where it operates, and it has contravened numerous mining regulations.

The Sunday Times reported at the weekend that the company might have been in breach of stock exchange rules by failing to disclose to shareholders that the government planned to shut the firm down this week. It is listed in Johannesburg, London, Frankfurt and Berlin.

“These guys (CRG) want to mine and not put anything back into the community, as a result people are calling for the nationalisation of mines because of government’s failure to act against these companies,” said Godfrey Makomene, the chairman of the Affected Communities Elected Representatives.

Makomene called on the department to “put its foot down” by withdrawing the firm’s mining licence because of its failure to commit to upliftment.

Department of Mineral Resources spokesman Bheki Khumalo said Shabangu would at a later stage make a decision on whether the company could continue to mine.

“They must make a representation tomorrow (Wednesday) … because the minister has informed it of her intention to cancel its licence.”

Makomene’s biggest problem with CRG was that it did not stick to its promise of creating 4 000 direct and 32 000 indirect jobs. Instead, there had been retrenchments at the firm, Makomene said. CRG promised to uplift communities with R54.2 million in projects.

Johan du Toit, CRG’s chief executive, was not available for comment. However, according to an earlier statement by the company, the social labour plan was based on CRG’s original 2008 operational plan submission that envisaged a considerably larger resource base.

CRG had to halt underground mining in March, citing rising acid mine drainage levels and unanticipated missing reefs. CRG made headlines when convicted fraudster Kenny Kunene was appointed as senior manager of community relations along with Gayton McKenzie, who was convicted for bank robbery.

CRG shares closed unchanged at 9c on the JSE. - Dineo Matomela

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