South African mining company Coal of Africa's share price plummeted on Monday morning following news that the Save Mapungubwe Coalition had withdrawn from a Memorandum of Understanding with the company.
The Memorandum of Understanding was signed in November 2011 committing both parties to working together and strengthening cooperation in the interest of sustainable development and the preservation and protection of the Mapungubwe Cultural Landscape in the Northeast of South Africa.
In a public statement released on December 7th, the coalition stated that there was additional information highlighting past and on-going non-compliance with water legislation at the Vele Colliery as well as existing detrimental impacts that required remediation.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Coal of Africa said it is of the firm view that the basis on which the Coalition is withdrawing and its allegations are inaccurate and said it had addressed this on numerous occasions with the Coalition.
The company further claimed that the Coalition had not, to date, been to the Vele mine in spite of numerous invitations from the company for it to visit in order to observe and appreciate the systems introduced to manage the environment.
Coal of Africa added that mine is regularly audited by environmental authorities and stated that to date it had not received negative feedback on environmental compliance. It said it is compliant with the requirements of the Environmental Authorisation for the mine as evidenced by the consistent compliance record exceeding 90% on environmental audits at the mine conducted by an independent environmental control officer and independent environmental manager .
The company reiterated that Vele has valid regulatory licenses and permits, including the Integrated Water Use Licence, for all of its activities and production would continue as planned. In this regard, it confirmed that the Coalition's withdrawal from the memorandum of understanding would not have an impact on the daily operations at the mine.
John Wallington, Chief Executive Officer, commented: "Coal of Africa looks forward to a constructive on-going working relationship with the coalition in the Environmental Management Committee established in terms of the Environmental Authorisation for Vele.
"The company would want the Coalition to utilise the committee constructively, as stated in their press release, to ensure compliance with environmental, water and heritage legislation at Vele, and the preservation and protection of the Mapungubwe Cultural Landscape."
Shares were down 8.0% at 11.5p by 09:24.
MF
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the USMedium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
