Johannesburg – The Hawks conducted search and seizure raids at the mineral resources department and Imperial Crown Trading on Wednesday as part of a probe into alleged fraudulent mining rights, it said.
“The operation follows criminal charges lodged by Kumba Iron Ore [JSE:KIO] (Sishen Iron Ore)…,” said Colonel McIntosh Polela.
“It is alleged that certain individuals from the department of mineral resources were involved in fraudulent issuing of prospecting rights,” he said.
The department’s offices in Pretoria and Kimberley were visited, it said in a statement.
“The department is fully co-operating with the Hawks and will provide all the assistance required by them to undertake their duties,” departmental spokesperson Zingaphi Jakuja said in a statement.
Polela said the Hawks also conducted search and seizure operations at two of Imperial Crown Trading’s offices in Kimberley and at a house belonging to an employee.
The charges being investigated had to do with the falsification of documents, among other things.
Earlier this year there was a dispute between Kumba, the department of mineral resources and Imperial Crown Trading about ownership of the rights to a 21.4% stake in Sishen.
Kumba, a subsidiary of Anglo American [JSE:AGL], owns 78.6% of Sishen, which is one of the world’s largest and richest iron ore mines.
Polela said the Hawks were assisted in the raids by the state attorney’s office.
One of the directors of Imperial Crown is Gugu Mtshali, who has been romantically linked to Deputy PresidentKgalema Motlanthe in media reports.
Jagdish Parekh, former CEO of JIC Mining Services, which is part-owned by President Jacob Zuma’s son Duduzane, is a key ICT shareholder.
The spat started when ArcelorMittal unit’s mining rights at Kumba’s giant Sishen iron ore mine in the Northern Cape lapsed in 2009 and ICT was awarded prospecting rights to the same piece of land – even though mining has been going on there for years.
Kumba had applied for mining rights over that same 21.4% stake to its Sishen mine it did not yet own. When the right was awarded to ICT, the iron ore producer applied to court to review the mining ministry’s decision. The case will be heard in August.
The Department of Mineral Resources confirmed the investigation and said it was fully cooperating with police.
ArcelorMittal said in August in would buy ICT for R800m, effectively to gain control once again of its lost slice of the mine and reinstate a lost preferential iron ore supply agreement with Kumba.
The proposed acquisition sparked furious allegations of corruption in the mining ministry because it also involved the transfer of a quarter of the steel-maker’s shares to black investors, including ICT and an investment group led by Duduzane Zuma.