Liberty Coal confirms that proceedings have been launched out of the Mpumalanga Division of the High Court of South Africa against Kego Mining in relation to the illegal mining operations on the Optimum Coal Mine mining right areas conducted by Kego mining from 1 April 2023.

In two separate sets of legal proceedings filed, Liberty Coal are claiming damages of just over R600 000 000 from Kego Mining for the intentional, wrongful and unlawful conduct in relation to the extraction, processing and sale of approximately 900 000 tonnes of coal from or about 1 April 2023 to March 2024.

As best as Liberty Coal can establish of the 900 000 tonnes of coal mined illegally by Kego Mining some 850 464 tonnes were mined whilst the business and property of Optimum Coal Mine was subject to a Preservation Order granted by the Gauteng Division of the High Court of South Africa, which Preservation Order was discharged by a settlement agreement per order of court on 1 February 2024.

The Preservation Order obtained by the National Director of Public Prosecutions on 23 March 2022 in terms of section 38 (2) of POCA, ordered the preservation of the property of Optimum Coal Mine and the appointment of a curator bonis who was tasked with assuming control of the property, to take care of the property, administer the property and do any act necessary to preserve the property whilst the Preservation Order was in force, pending a Forfeiture Order which would have resulted in the Optimum Coal Mine being forfeited to the State.

The performance and exercise of the Curator Bonis’ duties terminated upon the discharge of the Preservation Order in 2024 and the settlement reached between Liberty Coal and the National Director of Public Prosecutions paved the way for the assets, business and compromised liabilities of Optimum Coal Mine to be transferred to Liberty Coal in terms of the business rescue plan and in accordance with the Sale and Purchase agreement under which Liberty Coal acquired all of Optimum Coal Mine’s assets and business.

Whilst still tasked with the powers and functions of preserving the Optimum Coal Mine property the NPA appointed Curator bonis demanded Kego Mining to cease illegal mining operations in September 2023 – a demand which Kego Mining blatantly ignored. In a flagrant breach of the Preservation Order and not withstanding illegal mining activities in contravention to the MPRDA, Kego mining ignored the NPA appointed Curator’s demands, thereby interfering with the performance of his functions and powers.

Any person who intentionally refuses to comply with an order made in terms of Chapters 5 or 6 of POCA and / or who hinders a curator bonis in the exercise or performance of his or her powers and functions shall be guilty of an offence in terms of section 75 of POCA, which prescribes a fine or imprisonment not exceeding 15 years and two years respectively.

Notwithstanding the criminal sanction to be imposed on Kego Mining and its director Owen Nelson, in terms of POCA for breach of the Preservation Order, Kego Mining’s continued illegal mining activities and the extraction of 900 thousand tonnes of coal on Optimum Coal Mine’s mining area since April 2023 have caused a R600 million loss to Liberty Coal and its stakeholders. These funds could have been utilised by Liberty Coal to rehabilitate the mine, pay off Optimum Coal Mine’s creditors in terms of the Business Rescue Plan, benefit the employee or community trusts or pay Liberty Coal’s obligations to the NPA in terms of the settlement of the forfeiture proceedings.

Liberty Coal will in due course seek to engage with the NDPP and the NPA appointed curator bonis to understand why no action was taken to protect the assets under preservation and eagerly awaits the outcome of any action by the NPA to recover the unlawful proceeds resulting from Kego Mining’s illegal and unlawful dealings.