John Wallington, CEO of Coal of Africa Ltd (CoAL)
John Wallington, CEO of Coal of Africa Ltd (CoAL)

JOHN Wallington is CEO of Coal of Africa Limited (CoAL).

SUMMIT TV: CoAL shares are again under pressure after the Save Mapungubwe Coalition decided to withdraw from their memorandum of understanding with the coal miner on Friday announcing they saw no reasonable prospect of achieving best practice at the Vele mine through further talks. John, you’ve put out a statement that a number of the statements made by the Save Mapungubwe Coalition on Friday were inaccurate. Can you tell us which statements specifically?

JOHN WALLINGTON: It’s a very long-winded article from the Save Mapungubwe Coalition so it would be difficult to go through that in detail…

STV: I’ll read and you can respond — they said "it appears when it commenced mining that CoAL did not have all the authorisations required for water use associated with its operations and still do not have the authorisations. Although this is disputed by CoAL the Department of Water Affairs has advised the Save Mapungubwe Coalition Limpopo Coal had been instructed to apply for such authorisations but had failed to do so".

JW: That’s complete nonsense — the original agreement in the memorandum of understanding (MOU) was that there was an acknowledgment that Vele had the full environmental approvals from the Department of Water Affairs and the Department of the Environment. The whole MOU was that together we would find ways to go beyond compliance — so it was not just that we acknowledged that we had full compliance with existing legislation, but that we were going to go beyond that…

STV: Best practice…

JW: Best practice. To have best practice there are going to be big gaps — so how I understood the MOU is that we were going to identify those gaps together and move forward to close those gaps together. That hasn’t happened — we’ve identified some gaps and then they decided they didn’t like the gaps. I’m at a loss for words — I’ve put my personal reputation on this. Certainly the industry as a whole didn’t see this succeeding but I thought we could succeed. Maybe I was a bit naive. Quite frankly it’s become irrelevant in my view — they are part of the environmental management committee and there is a range of people involved in monitoring Vele, from the Department of the Environment to South African National Parks to the Department of Water Affairs, as well as interested and affected parties from around the mine, which probably makes the MOU irrelevant anyway.

STV: Your statement said the MOU might have addressed some of the gaps …

JW: Towards best practice, not compliance.

STV: What are those gaps?

JW: We are still identifying them together — our company sponsored some studies that we were working through with them, and we will continue to adequately address those gaps. There are always going to be gaps — there isn’t a single mine or activity in this country that doesn’t have significant gaps. I think it’s all got a little out of kilter…

STV: This is a very sensitive area they are referring to with a lot of cultural and ecological significance, so one wants to aim for best practice…

JW: We are, and we will reach best practice with or without the Save Mapungubwe Coalition.

STV: You mention in the statement you put out that you are regularly audited by the environmental authorities — do you publish the results?

JW: We haven’t — I must check with the government authorities whether we can — but certainly we’ve had fantastic results. We’ve also had a significant number of visits from farm organisations that have been impressed. Every audit that we’ve had from the Department of Water Affairs and the Department of the Environment we’ve had above 90% so we’ve had extremely good audits from the EMC (Environmental Management Committee). We will always have gaps and we will need to continuously fix that but we have a very passionate team on the ground who want to make a difference and be the best. We have a lot of distinguished environmentalists who are helping us get there and it looks like the Save Mapungubwe Coalition won’t be a part of that.

STV: The Save Mapungubwe Coalition referred to new research that had come to light that "an independent expert had identified detrimental impacts on water courses as a result of unauthorised water use activities that require urgent remediation".

JW: Again that’s complete nonsense and that’s where I get frustrated. The whole idea was to have that study and identify gaps and together we were going to say, "This is how we are going to resolve it." It was not to say, "Here are the gaps — you are not now compliant." That is complete nonsense. These water courses they’re talking about we’ve had significant heavy rainfall recently and there wasn’t a litre of water that went down those water courses so it depends on what one identifies as a water course. I am very frustrated with this and we are going to achieve best practice at Vele with or without the Save Mapungubwe Coalition. The EMC which was part of the approval of that mine is working extremely well and the Save Mapungubwe Coalition are part of that EMC and hopefully they will participate as constructively as everybody else does.

STV: The MOU, and that an agreement can no longer be reached — does that impact on your activities, or will you carry on regardless?

JW: It doesn’t impact — we comply fully. We are extremely motivated to make Vele a best practice and we’ve had significant recognition that we are doing that. If the Save Mapungubwe Coalition don’t want to recognise that, that’s their baby.

STV: Do you foresee any legal challenges? That’s how they started and then they decided to negotiate…

JW: We don’t foresee any legal challenges and if there are we will fight them tooth and nail.

STV: It is the case that you’ve had a lot of challenges, not just at Vele but at Makhado and Mooiplaats, so it’s been a very difficult year for CoAL — do you anticipate it getting any easier?

JW: It’s been a difficult year for the mining industry, it’s been a terrible year. Mooiplaats has been caught up in the labour issues, which is very sad. It’s very difficult and these are the industry issues we’ve had and I hope for the country and mining industry we have a better 2013.

STV: Environmental issues aside, what is your message to shareholders, a lot of whom have watched the share price sink to new depths?

JW: Sadly the company is in a very difficult position at the moment — both from a country point of view with the high risk, and the fact that all junior mining companies right now are struggling, including CoAL. I came in when Vele had already been closed and we’ve done everything to try turn that around and make it a best practice site which we will succeed with. I have no doubt that we will succeed and that’s the message we are giving shareholders directly — and some of them have come to visit the mine — that we are going to achieve that goal. We certainly have every intention of wanting to achieve that goal.