Question NW688 to the Minister of Public Enterprises
07 May 2018 - NW688
Mazzone, Ms NW to ask the Minister of Public Enterprises
(1)What are the reasons that the head office of Alexkor SOC Ltd is situated in Johannesburg when it is a marine diamond company based in Alexander Bay in the Northern Cape; (2) whether Alexkor’s offices in Johannesburg and Alexander Bay duplicate any corporate services; if so, (a) what are the relevant details, (b) why are these corporate services being duplicated and (c) on what statutory grounds are these services being duplicated; (3) whether he has found that Alexkor SOC Ltd is financially secure and will have sufficient funds to continue its operations in the future; (4) whether any marine mining vessels have (a) been grounded and/or (b) not been granted permission to continue work for Alexkor SOC Ltd in each of the past three financial years and since 1 April 2017; if so, (i) why and (ii) what are the further relevant details in each case?
Reply:
Response is based on information received from Alexkor
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Alexkor, as a result of the Deed of Settlement (DoS) entered into with the Richtersveld Community (RC) has been left with its only asset being the marine diamond mining rights in the Richtersveld.
The marine and land diamond mining have been pooled into an uni-corporated structure called the Pooling and Sharing Joint Venture (PSJV). This is the structure that owns and operates the mine on the Richtersveld.
Thus, Alexkor does not at present have any mining operations. Therefore Johannesburg is the best location while it is seeking opportunities to establish its own operations. The ease of access to mining houses and finance houses makes the location ideal, and this applies to other mining companies located in the city but with operations across the continent.
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2. |
(a) |
No corporate functions are being duplicated.
Although the PSJV is a self-contained entity in Alexander Bay, it is governed by its own Board consisting of three NEDs from both Boards of Alexkor and the RMC (three interim NEDs appointed by the Court on behalf of the RMC), and has its own employees. It is a Joint Venture and is not incorporated, neither is it bound by the provisions of the Public Finance Management Act (“PFMA”). Alexkor is therefore required to maintain a Head Office in Johannesburg to fulfil all the statutory requirements of a State-Owned Company. |
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(b) and |
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(c) |
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3. |
While Alexkor sole source of income is its share of the proceeds from the PSJV, it will continue to struggle to make ends meet as the PSJV has had challenges with a deep sea mining vessel being damaged and withdrawn from service and the land mining operation not yielding sustainable diamond volumes. At this stage, interest from cash holding is meeting the shortfall; however, a long term solution is being sought including acquisition of mining assets and value addition on current Richtersveld diamond production. |
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4. |
(a) |
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The Minister of Public Enterprises has instituted a forensic investigation into, amongst others, the termination of three (3) shallow water mining contractors. The Department will be able to provide further details at the conclusion of the investigation. |
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(b) |
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(i) |
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(ii) |
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These matters are being reviewed by the Minister.