Shock and ore: dirt flies in Sishen battle
Sishen Part One: The lawyer people trusted
An alleged assassination attempt has driven a witness to go public with allegations of collusion between ICT and the department of mineral resources.
A legal consultant who claims that he survived an assassination attempt on a lonely stretch of the N7 highway between Cape Town and Springbok last month has come to the Mail & Guardian with an incredible story.
Gawie Hendriksz says he knows how politically connected mining company Imperial Crown Trading 289 (ICT) acquired a multibillion-rand stake in the Sishen mine in the Northern Cape during the long weekend of May 2009.
ICT provisionally acquired a 21.4% stake in Sishen when it beat Anglo American's subsidiary Kumba Iron Ore to the rights for what both companies believed was a vacant stake in one of the world's largest opencast iron ore mines.
Sishen Part 2: Mystery death of a lonely official
Sishen Part 3: Prosecutor takes flak
ICT and Kumba have spent millions in court sparring over the allocation of the 21.4% stake, and have laid criminal charges against one another. (see "Sishen – the story so far" below)
Hendriksz, who since July 2011 has been under contract to a risk consultancy acting for Kumba, makes the following key allegations:
ICT co-founder and chief executive Phemelo Sehunelo paid a bribe of R250 000 to Charles Lerumo, the department of mineral resources's Northern Cape assistant director of mineral laws to facilitate the acceptance of ICT's application;
Lerumo kept R150 000 and passed R100 000 on to Thozama Basi, the department's Northern Cape assistant director of social and labour plans;
Basi, who took possession of Kumba's application on April 30 2009, made copies of documents such as title deeds from this application during the subsequent long weekend. She then handed these copies to Sehunelo; and
ICT's application was incomplete and unsigned at the time it was purportedly captured on the department's computer systems on May 4 2009. Lerumo saw to the capturing of ICT's application on May 4, even though the ICT application was in fact only signed on May 5 that year. This is significant, as Kumba's application was also registered on May 4 and legislation promotes a "first past the post" approach to competing applications.
Basi chose not to respond to detailed allegations put to her by the M&G. Lerumo would not even entertain the questions.
'Scurrilous liar'
Responding on behalf of Sehunelo and ICT, attorney Ronnie Mendelow described Hendriksz as "nothing but a scurrilous liar seeking to peddle 'information' (in actual fact disinformation) to the highest bidder".
Mendelow said that during a taped interview with ICT's lawyers on November 2 2010, Hendriksz had offered a different version, in which Kumba had in fact bribed the department of mineral resources officials.
Mendelow said: "Suffice it to say that these allegations were all without any foundation whatsoever, and that the allegations regarding paying off of advocate Charlie Lerumo by our client, advocate Sehunelo are completely false and without any foundation whatsoever."
Mendelow said that on his own version, Hendriksz had attempted to "peddle his information" to Kumba and ArcelorMittal. "Mr Gawie Hendriksz's alleged desire … to make the facts known before somebody succeeds in killing him, is a conjured up story," Mendelow said.
Arcelor potentially lost the 21.4% stake in Sishen it previously held by failing to convert its rights in terms of new legislation by the end of April 2009.Before the M&G contacted Mendelow, Hendriksz had disclosed his interaction with ICT to the newspaper, claiming that he had "played along" with the latter as part of his own investigation.
Hendriksz had also disclosed his interactions with both Kumba and Arcelor to the M&G.
The DMR also dismissed Hendriksz as "an information peddler", claiming he had previously approached the department to offer his assistance in the matter. The department rejected his approach.
While Hendriksz's allegations have not been tested in court, he has made a detailed affidavit to the Hawks investigator probing ICT's conduct.
No assessment of his credibility is complete without considering his role in the successful investigation of another case involving the Kimberley department of mineral resources office -- the so-called Saltworks case.
The Saltworks case
In this matter, Hendriksz was hired by Jalie du Toit, owner of Saamwerk Soutwerke, which had been on the brink of acquiring a mining right from the department to extract salt from a pan near Upington in 2006 when a rival mining company, Suid-Afrikaanse Soutwerke (SA Soutwerke), produced what it claimed was a valid permit to mine the same saltpan.
Du Toit's suspicions were raised because two well-connected Northern Cape politicians -- ANC regional chairperson John Block and Upington mayor Gift van Staden -- had become directors of SA Soutwerke four months earlier. Du Toit hired Hendriksz to investigate.
Hendriksz made it his business to find out how mineral rights were awarded, and by whom, in the office of the department of mineral resources in Kimberley.
"In the course of my Soutwerke investigation, I was in the department office in Kimberley every second or third day until they got used to me," he told the M&G.
By May 2009, when the 21.4% stake in Sishen became vacant, sparking the scramble between Kumba and ICT, Hendriksz said his investigations into SA Soutwerke’s permit had "intensified".
"I was regularly attending at the Kimberley office of the department and was meeting several officials on a regular basis ... [deputy director] Hennie Jansen van Rensburg and [assistant director of mineral laws] Charles Lerumo in particular.
"I sought not only to obtain information from them, but also, unknown to them, to cross-check information provided by one of them with the other. I avoided consulting them jointly," Hendriksz said.
In May 2009, Jansen Van Rensburg was temporarily heading the regional office in Kimberley because his superior, Pieter Swart, had taken leave.
On May 18, Hendriksz said Jansen Van Rensburg called him into his office and said: "Here is a file on my table. I’ve got exactly the same case and problem with Kumba and ICT like in your matter with SA Soutwerke. The same what happened on your side. The permit is fraudulent, with high-up cover-up."
At another meeting a few days later, on May 21, Jansen van Rensburg told Hendriksz what he meant by "high up". "He said to me: 'There is also involvement on the political level. There's someone called Jagdish Parekh who also has a lot of influence [in ICT]. You'll see, sooner or later -- like John Block [with SA Soutwerke] -- he'll be brought in as a partner for ICT."
ICT lawyer Mendelow, responding on behalf of Parekh, said Parekh "had nothing whatsoever to do with ICT in May 2009 and thereafter when our client's application for the prospecting right was granted. He first became involved in ICT well after the prospecting right had been granted."
Hendriksz said that at another meeting on June 10, Jansen Van Rensburg told him that his superior, "Swart, had instructed him, during the course of April 2009, that he [Jansen Van Rensburg] was to take over as acting regional manager of the Northern Cape regional office for the month of May 2009.
"Jansen Van Rensburg was to prepare for the lodging of a prospecting right application by ICT during this period, and was to ensure that this application was accepted, regardless of any irregularities with it," he added. The instruction had apparently come from one of Swart's superiors in Pretoria.
Swart denied this, saying: "I've never given Mr Van Rensburg the instruction as set out in your letter. My holiday arrangements [in which Jansen Van Rensburg would act] were made a considerable time before the end of April 2009 [when the Sishen applications were lodged]."
As Jansen van Rensburg has since died, Hendriksz's recollection of their encounters cannot be confirmed. (Sishen Part 2: Mystery death of a lonely official)
In the interim, the salt mine dispute Hendriksz had been investigating reached its conclusion, providing an independent test of the credibility of both Hendriksz and Swart.
The case, heard in September 2009 in the Northern Cape High Court, turned on allegations that the mining permit on which SA Soutwerke relied -- produced by the ANC's Block at a meeting with the DMR -- was a forgery.
Before the hearing department of mineral resources officials -- including Swart -- gave sworn statements supporting Block's SA Soutwerke and suggesting the fake permit was legitimate.
By the time Hendriksz came to testify, Swart's statement had been mysteriously withdrawn and Hendriksz's evidence of manipulation and double-dealing by the department was hardly challenged in cross-examination.
In his ruling Judge Hennie Lacock found that SA Soutwerke's permit was a fake. The judge made no mention of Hendriksz, but Jasper Tredoux, Saamwerk Soutwerke's advocate, said: "Gawie was a truthful witness … But his greatest importance was behind the scenes.
"He helped unravel everything that happened in the department of minerals, who did what with regard to the mining licence applications."
His employer in this matter, Du Toit (owner of Saamwerk Soutwerke) said: "In the court case there was a lot of bullshit on the department's side. I stood alone; nobody in the department would help me understand where the other permit came from. But Gawie helped me.
"Without Gawie's investigation I could not have taken this case to court."
Building trust
The relationships Hendriksz built with department of mineral resources officials during the Saltworks case, particularly with Lerumo, were crucial to the alleged disclosures they made to him about ICT.
Said Hendriksz: "Lerumo was the department's legal advocate, so I was working a lot with him [on the Soutwerke matter]. I slowly built up trust with him …"
In mid-2010, the department charged Lerumo with misconduct and regional manager Swart summoned him to a departmental disciplinary inquiry. On June 10, Hendriksz said that Lerumo had approached him for advice.
He had suggested to Lerumo that he remind Swart of his own alleged conduct in the ICT matter. According to Hendriksz, the charges were then withdrawn.
In February 2011, when the department revived misconduct charges against Lerumo, he and Hendriksz met again -- and on this occasion Hendriksz decided to record the conversation. He asked ex-policeman Andreas Steenkamp to sit in a car outside the Protea Hotel in Kimberley, where the two men met, tap their exchange using a remote listening device and transcribe it in a notebook.
The alleged conversation took place on February 21 in the hotel reception area. Steenkamp refused to discuss the encounter with the M&G, but confirmed that he had given a sworn affidavit to the police, the content of which is unknown.
The M&G has seen a copy of Steenkamp's purported shorthand notes from this encounter. At face value, they support Hendriksz’s claim that Lerumo admitted receiving money from ICT's Sehunelo and that he also implicated department of mineral resources official Basi.
The M&G understands that Swart eventually proceeded with disciplinary action against Lerumo, who was found guilty. The charges included an allegation that Lerumo accepted R5 000 from a mining consultant to speed up the processing of their applications, though it is not know if this particular charge was proved.
Lerumo is still employed at the department in Kimberley.
Hendriksz said his attempts to persuade Lerumo to approach the police and seek indemnity from prosecution had not borne fruit.
‘Controversial decision’
In addition to developing ties with Jansen van Rensburg and Lerumo, the third -- and possibly most controversial -- aspect of Hendriksz's investigation was his decision to approach all five parties in the dispute, the police, the department of mineral resources, Kumba, ArcelorMittal and ICT, to offer information.
According to Hendriksz, he first approached Colonel Tobias Marais of the South African Police Service, who had investigated SA Soutwerke, to tell the Hawks that if they wanted to know "exactly what happened about ICT" they should get in touch with him. The Hawks did not respond.
Hendriksz then approached Kumba's attorney, Robert Botha, who told him that "Kumba does not buy information". Hendriksz said he responded that he did not want to sell anything, but that Kumba could take him on as a consultant. Botha's reluctance gave Hendriksz "a feeling that they had already burnt their fingers somehow".
Hendriksz said that because "ArcelorMittal and Kumba were the only two companies that had nothing to do with ICT's fraud and bribery of DMR personnel", he approached Arcelor next. Hendriksz claims he made contact with a senior Arcelor executive, who told him that they were not worried about ICT. Only later did he learn that Arcelor had been negotiating to buy ICT.
Finally, Hendriksz said he was contacted by Lerumo, who wanted him to meet ICT chief executive Sehunelo. Lerumo set up the appointment, and the two met at ICT's Kimberley offices on October 25 2010.
"During this meeting, Sehunelo said that he understood that I was someone who knew a lot about what had transpired regarding ICT's application over the 30 April to 4 May 2009 weekend. I replied that I did.
"He then said that I could perhaps assist ICT by deposing an affidavit that would support ICT's case.
"Sehunelo explained that I would have to depose an affidavit in which I would falsely state that I was aware of collaboration between Kumba and officials in the department which resulted in department officials tampering with the ICT application by inserting documents from the Kumba application. This was to make it appear that the ICT application had been submitted using copied documents."
Hendriksz undertook to work with ICT, saying: "I wanted to play along with them, to understand who the key role players are behind the curtains there. I wanted to establish what political roleplayers with influence were ... in ICT."
Saamwerk Soutwerke's lawyer Tredoux supported his explanation, saying: "Sometimes you have to go under cover and disguise your intentions in order to uncover the truth."
The following week ICT flew Hendriksz from Cape Town to Johannesburg, where he met ICT attorney Mendelow and advocate Edmund Wessels in the latter's Sandton chambers. The M&G has seen a record of the 1Time return flight booking made by Sehunelo's personal assistant Sharifa Ferris.
At the Johannesburg meeting Hendriksz said he had "said what Sehunelo asked me to say".
Mendelow confirmed the meeting, and gave the M&G access to a transcript in which Hendriksz indeed repeated the claim that Kumba paid a former official from the department to meddle with ICT's application.
In a transcript of the recording which the M&G has seen, Hendriksz promised ICT further information about who took bribes in the department from Kumba in return for employment as a consultant. He also offered to testify for ICT in court.
Wessels expressed interest in Hendriksz's information, but the interview did not end with a definitive undertaking by either party.
In their response, Mendelow and Hendriksz agreed that both parties had lost interest in each other soon after this meeting. Mendelow said that he believed Hendriksz was an information-peddler, while Hendriksz said: "I would not have consented to being so engaged, given my knowledge of the fraud perpetrated by ICT."
In July 2011, a consultancy called Risk Analysis, retained by Kumba's legal team to identify evidence or witnesses which could assist the company's litigation strategy in the ICT matter, made contact with Hendriksz.
Risk Analysis's Mungo Soggot said: "We approached Mr Hendriksz ... after learning that, on account of his work in the Saamwerk matter, he was uniquely placed to provide an insight into what took place at the DMR Kimberley office in April 2009.
"His brief was to help us identify other potential witnesses to the impropriety he described. In particular, his brief was to explore whether Charles Lerumo -- with whom he had a close relationship -- could become a witness. It was never intended at this stage that he would be a witness himself," said Soggott, a former M&G journalist who left the newspaper in 2002.
Hendriksz entered into a contract with Risk Analysis. Ultimately, Kumba and its legal advisers introduced him to the Hawks. Hendriksz said his ultimate goal was to stamp out corruption in the department, which is "damaging the mining industry".
By the deadline, iron-ore miner Kumba, had applied to convert its 78.6% stake in the Sishen iron mine. But steel manufacturer ArcelorMittal, with the remaining 21.4%, had not. Kumba and an obscure shelf company, Imperial Crown Trading 289 (ICT), raced to acquire the rights to ArcelorMittal’s 21.4% stake, estimated to be worth R800-billion over the mine's remaining life.
But May 1 -- a Friday -- was a public holiday.
On Monday May 4, Kumba and Imperial's applications for the vacant Sishen stake were recorded on the department's system in Kimberley. ICT applied for a prospecting right, Kumba for a mining right. Controversy now surrounds both applications.
ICT claims Kumba acted deceitfully by handing in its application early and asking department officials to lodge it on May 4.
Kumba claims that ICT's application was not ready on May 4, but that officials recorded ICT’s application as lodged on that day -- even though ICT's application trickled in over succeeding days.
Both companies also accuse one another of bribing officials to tamper with their rival's application.
In November 2009, the department handed ICT a prospecting right on the basis that both applications had arrived on May 4, but that ICT had superior BEE credentials.
One of ICT’s founding directors was Prudence "Gugu" Mtshali, reportedly Deputy President Kgalema Motlanthe's romantic partner. Motlanthe was South Africa's caretaker president in May 2009 when ICT applied for the stake.
In March 2010 ICT handed over a 50% stake to JIC Mining, represented on its board by Jagdish Parekh. JIC is controlled by the Gupta brothers, benefactors of the Zuma family.
In August 2010 Arcelor offered to buy out Imperial and incorporate its directors into a new consortium that included President Jacob Zuma's son Duduzane and Parekh, making them instant billionaires.
But the buy-out was never consummated. Instead, Kumba and Arcelor won a High Court judgment in December 2011 that mineral rights over a single area are indivisible and that Arcelor's old order 21.4% stake is fully Kumba's.
ICT are now out in the cold, although it finalised its appeal against Zondo's ruling last week.
In July 2011, the Hawks raided ICT’s office and the department in Kimberley for evidence of fraud when the applications were made.
ICT has challenged the legality of the raids, and the seized materials are currently out of the Hawks' reach.
* Got a tip-off for us about this story? Email amabhungane@mg.co.za
Breytenbach's position has since been clouded by confusion, with a second announcement by the NPA that it had issued the advocate with a letter of intention to suspend her, although she could make a case challenging it.
The move has raised fears that she has suffered collateral damage in a fight by Imperial, and specifically by its politically connected directors and shareholders, to avoid criminal prosecution.
Sishen Part 1: The lawyer people trusted
Sishen Part 2: Mystery death of a lonely official
Imperial is locked in a legal battle with the Hawks over the legality of co-ordinated search and seizure raids on it and the department of mineral resources in July last year.
Hawks investigating officer Sandra van Wyk obtained the warrant for the raids on the grounds that Imperial was alleged to have colluded with department officials to commit fraud, forgery, uttering and corruption in respect of their and Kumba's applications for rights to the Sishen iron ore mine.
In November last year Imperial lodged an affidavit in the Northern Cape High Court accusing Breytenbach of bias. It cited an incident during a court hearing when Breytenbach and Michael Hellens SC, an advocate maintaining a watching brief for Kumba, sat together. Imperial claims the pair "were obviously there on joint business" and "were continuously seen huddled together in discussions".
'Exerting improper influence'
"Hellens was possibly exerting improper influence on behalf of his clients, Sishen and Kumba, over Breytenbach, her staff and the police investigators," it said.
Imperial also complained about an allegedly improper approach by Hellens to advocate Nazir Cassim to try to persuade one of its directors, Archie Luhlabo, to turn state witness.
Imperial said Hellens had no right to float such an offer, which was the prerogative of the NPA, and that his conduct further demonstrated his improper relationship with Breytenbach.
Hellens and Breytenbach declined to comment.
The NPA also declined to comment, but released a statement this week, saying "an internal disciplinary process is a matter between the employer and the employee, and the details pertaining to that disciplinary matter are to be treated with confidentiality".
In a reply to questions, Kumba said the interaction between prosecutor and counsel "is common practice".
Hellens: 'Well-known and reputable'
"Hellens is a well-known and reputable senior counsel that specialises in criminal matters. Due to that specialisation, Kumba would assume that Hellens and Breytenbach have often been required to interact on a professional basis, either as opposing parties on matters, or on the same side," the company said.
Regarding Cassim, Kumba said the company's understanding was that there was an informal discussion between him and Hellens "as colleagues".
"Advocate Hellens spoke to advocate Cassim on the understanding that advocate Cassim was representing Mr Luhlabo on the basis of information which suggested that Mr Luhlabo might be considering turning state witnesses. Advocate Hellens could not offer any S204, as such an offer would only be made by the state."
More broadly, Imperial's complaint of bias by both Breytenbach and Van Wyk stems from the fact that, although both the company and Kumba have laid charges of fraud against each another in connection with the disputed 21.4% stake in Sishen, the Hawks have raided only Imperial.
The M&G understands that Imperial also presented its complaint in person to former director of public prosecutions Menzi Simelane.
This was reportedly done in the presence of Breytenbach’s direct boss, Lawrence Mrwebi, who was recently appointed head of the NPA's serious commercial crimes unit.
Temporary compromise
Soon afterwards, Breytenbach was threatened with suspension, but a compromise was reached -- she stepped down as the prosecutor of the Imperial case while retaining her position as head of the Gauteng's serious commercial crimes unit.
In December the NPA provisionally dropped fraud charges against suspended crime intelligence boss Richard Mdluli. Although Breytenbach was the prosecutor in this case, Mdluli approached Mrwebi directly to have the charges dropped.
Breytenbach is understood to have resisted this and tried to have them reinstated.
The announcement of Breytenbach's suspension last week coincided with the announcement that the remaining charge of murder against Mdluli had also been provisionally dropped. It led to speculation that Breytenbach has been suspended for refusing to back down in this matter.
However, it is understood that Breytenbach was not assigned as prosecutor in the Mdluli murder case and the NPA, in its correspondence with Breytenbach over her suspension, referred only to her alleged conduct in the Imperial matter.
Breytenbach has apparently challenged her bosses to provide reasons for suspending her. They have responded by asking her to give reasons why she should not be suspended.
'That's all we wanted'
Imperial's attorney, Ronnie Mendelow, said: "Breytenbach was removed from the investigation against our client and replaced by another state advocate, who will act without fear, favour or prejudice. That is all our clients required from the national director of public prosecutions."
An advocate who has represented clients Breytenbach has prosecuted said: "She's odd. Before court she’ll call you 'babe' and be friendly. Then she'll drill the living shit out of you in court. Then afterwards she'll be friendly again.
"Basically, she's a rock solid prosecutor that lawyers fear on the one hand and love on the other."
* Got a tip-off for us about this story? Email amabhungane@mg.co.za
But circumstances surrounding MTN's audacious entry into Iran, and the South African government's concurrent diplomatic efforts there, provide a compelling context for the claims.
MTN could also face increasing international pressure because the Iranian military owns one of MTN's two state-linked partners there, Iran Electronics Industries (IEI).
IEI is also the subject of a web of United States and European sanctions that target proliferators of "weapons of mass destruction".
In 2005, MTN controversially displaced Turkcell in a consortium that had provisionally won a lucrative mobile phone licence in Iran. Turkcell was, until then, a leading partner in the bid.
Last week, MTN pre-emptively announced claims by its Turkish counterpart that in 2004 and 2005, "in an effort to cause the Iranian government to issue the licence to MTN", MTN had bribed officials in South Africa and Iran.
In the release, MTN also revealed that it was said that it leaned on the South African government "at a meeting of the International Atomic Energy Agency in November 2005" to support Iran on nuclear power development in the face of intense international pressure, and that MTN "enlisted" the South African government to facilitate the provision of military equipment there.
The Mail & Guardian has not seen evidence to back these claims, and both MTN and Turkcell refuse to elaborate.
But MTN did not deny the allegations, saying only that it "believes that the Turkcell US claim lacks legal merit" and that US courts would not have jurisdiction.
Inquiry
MTN has launched an inquiry into the allegation under former jurist Leonard Hoffmann.
An analysis of South Africa's diplomatic relations with Iran in 2004 and 2005 and the process leading to MTN's licence award provides a credible scenario for Turkcell's claims, suggesting an interweaving of commercial and diplomatic interests.
The department of international relations and co-operation has echoed Minty's denial, saying no one influenced policy implementation.
Charnley could not be reached and an official in her office said she was abroad. Messages were left for Pahad, but he did not respond.
* Got a tip-off for us about this story? Email amabhungane@mg.co.za
His speech was simpler than before, but solid -- and indicated a workmanlike approach to getting momentum going on key areas of focus in the economy.
Liberation allies hailed
During the ANC's centenary celebrations in Mangaung in January, Zuma was criticised for not acknowledging the contribution of other liberation role-players, and he appeared to make up for it by using his speech on Thursday night to acknowledge the role of the Pan Africanist Congress of Azania and the black consciousness movement, as well as Helen Suzman of the Democratic Party.
Speaking in a week when nationalisation was a major talking point, both at the mining indaba and in the discussion document released by the ANC indicating that the party would move away from the controversial proposal, Zuma referred to it only indirectly, once again assuring investors that they need not worry about adverse conditions in the mining industry.
"We remain committed to the creation of a favourable and globally competitive mining sector," he said. "And to promote the industry, to attract investment and achieve both industrial growth and much-needed transformation."
Jobs, jobs and jobs
Reflecting on his job promises of last year, Zuma said the results were promising but appeared to blame the global economic situation for the failure to meet targets.
"The fourth quarter figures released on Tuesday indicate that the rate of unemployment has come down from 25% to 23.9% as a result of new jobs. During 2011, a total of 365 000 people were employed. This is the country's best performance since the recession of 2008."
He expressed his satisfaction that the jobs were being created in the formal sector including in mining, transport and trade and attributed that to greater cooperation with business.
The president said the money set aside last year at the Industrial Development Cooperation (IDC) had been utilised well, with R5-billion approved for 60 companies to promote job creation.
He also gave a nod to the thorny issue of labour broking, noting that National Economic Development and Labour Council (Nedlac) discussions on "atypical employment" had been finalised.
It is, however, noteworthy that he highlighted that the state wishes to ban "abusive practices inherent in labour broking". This suggests that the labour legislation review will just mean more regulation of the sector rather than an all-out ban.
Infrastructure drive
As the Mail & Guardian predicted last week, the president announced a massive infrastructure drive, which he emphasised was not for the sake of mere infrastructure building.
"The massive investment in infrastructure must leave more than just power stations, rail-lines, dams and roads. It must industrialise the country, generate skills and boost much-needed job creation."
The infrastructure plan would be driven by the presidential infrastructure coordination commission (PICC), which will be led by the president and his deputy.
However, the many announcements of infrastructural developments leaves one wondering where the government will get the money to fund all of these projects?
Soccer practice
The state is aiming to use the expertise learnt during the Fifa World Cup in 2010 to deliver on this plan. The PICC leads the process and will coordinate and drive key infrastructure projects identified from SOEs, provincial, local and national government.
The projects are to be geographically focused as well as focus on health and basic education infrastructure, information and communication technologies and regional integration.
The geographic focus starts in Limpopo in the Waterberg in the western part of the province and Steelpoort in the eastern part, intending to unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals, in order to facilitate increased mining as well as stepped-up beneficiation of minerals.
This talks to the government's beneficiation strategy and points to the strategic minerals that the ANC nationalisation document has identified.
There is an emphasis on rail with the plans by Transnet to invest R300-billion in capital projects over the next seven years. R200-billion will be used for rail investments the rest for ports.
The iron ore freight lines in the Northern Cape will be expanded from 60-million tonnes to 82-million tonnes.
The white elephant in the room
But plans to build a manganese corridor to the Coega harbour will be seen as little more than an attempt to feed a white elephant, as the Chamber of Mines CEO Bheki Sibiya has already noted. The cost of shipping ore to Coega rather than Saldanha is over twice the price per tonne and this appears little more than an attempt to find a way to pay for a bad policy decision.
Plans to decrease port charges are also on the cards, with manufacturers expected to see decreases in port charges to the value of R1-billion.
These steps are likely to encourage businesses that have complained of logistics bottlenecks, and high administrative prices that have eroded South Africa's competitiveness.
The port's plans may be a big plus for the exporters and businesses that have complained of the high prices and left our ports far more expensive than their global counterparts.
The extent to which the government is taking on the work load is further evidence of an ever encroaching state involvement in the economy. But Zuma did not mention how the private sector can help in this infrastructure effort, despite the very cooperative role it played in making South Africa a successful host of the World Cup. The plan to hold an infrastructure summit appears to be where the state will hold talks with social partners and stakeholders to take the plan to potential investors.
Lights, camaraderie, action
The role electricity will play in making it possible for this expansion to go ahead is critical -- and Zuma did not ignore the power crisis the country faces. He has approached Eskom regarding the question of rising prices but acknowledges that tariffs need to remain at a level that ensures that Eskom and the industry remain financially viable.
But again little was made of the need for private sector players in this respect. Government's limited policy planning and Eskom's monopoly in the market are exactly why the country is experiencing these problems.
Agriculture and water resources are also acknowledged -- with plans to build a new dam in the Eastern Cape on the Umzimvubu River and a series of water augmentation projects being outlined. This is a much-neglected element of infrastructure development, and it's good to see it is not being ignored -- but as the DA's spokesperson on water and environmental affairs Gareth Morgan points out, many of the augmentation schemes outlined, while very good, are not new,
With the mega-infrastructure drive, the intense competition between the needs of farmers and communities versus the water needs of major construction projects will only become more intense, he said.
For news and multimedia on the State of the Nation address visit our special report.
Related Articles
In February 2004, a consortium called Irancell was provisionally awarded a sought-after licence to open Iran's second mobile phone network. Turkcell, a 70% shareholder, led the consortium.
Turkcell's partner in the consortium was the Iran Electronic Development Company, made up of two state-linked companies: IEI and the Mostazafan Foundation of Islamic Revolution.
Before the licence could be finalised, it needed to be approved by the Iranian Parliament and Turkcell had to pay a €300-million licence fee.
However, news reports and market releases from Turkcell show that parliamentary approval was delayed throughout 2004.In August 2004, South Africa's former deputy foreign minister, Aziz Pahad, flew to Tehran for preparatory talks before a binational meeting.
While there, Pahad met Mostazafan Foundation president Mahmoud Farouzandeh. A department of international relations and co-operation statement said Pahad and Farouzandeh explored political and economic relations, particularly "in the fields of electricity, communication and oil and energy".
No specific mention was made of MTN or Irancell.That December, at the South African-Iranian Joint Bilateral Commission, South Africa's then foreign affairs minister, Nkosazana Dlamini-Zuma, said $4-billion in South African investments in Iran were "nearing finalisation".
She did not mention MTN directly, but a joint statement the following day revealed that MTN was one of six South African companies at the conference.
The statement said MTN had recently opened a Tehran office having "identified the potential of the Iran telecommunications market".
No mention was made of the licence to be awarded to Irancell, but MTN was ostensibly interested in a third mobile-operator licence on the cards and the possible privatisation of the existing licence.In January and February 2005, according to Turkcell market releases, "unofficial" government statements suggested the Iranian Parliament had resolved that Turkcell should reduce its stake in Irancell from 70% to 49%. By June, Turkcell was responding to unconfirmed reports that it had been excluded altogether.
Throughout 2005, Iran came under intense pressure from the US, Europe and Israel, which believed Iran was covertly building nuclear weapons while claiming its activities were civilian.
In September 2005, a US and European-sponsored resolution was passed by the International Atomic Energy Agency (IAEA) finding Iran guilty of violating its commitments as a Nuclear Non-proliferation Treaty signatory and resolving to refer it to the United Nations Security Council.
In the lead-up to the September resolution, South Africa emerged as an important player.
As South Africa had taken a sympathetic line on Iran's nuclear programme and wielded considerable influence among developing nations, it was courted by the US, Israel and Iran itself, which sought assistance in negotiations with the West.
Represented by its delegate Abdul Minty, South Africa abstained from the September IAEA vote.That same month, Turkcell agreed to reduce its shareholding in Irancell to 49%, but news reports claimed days later it had been replaced by "another firm". Turkcell insisted it had received no formal communication.
Ten days later, MTN publicly expressed its interest. Its executive, Irene Charnley, invoked South Africa’s good relationship with Iran, saying the company had decided "to contribute" to the consortium.
"Iran and South Africa enjoy good political and economic relations and MTN hopes to have a significant share in promotion of the ties," she said.
Throughout October 2005, comments by local officials suggested Turkcell had been replaced, while it insisted it had not been ousted from the consortium.On November 21 2005, MTN announced it was the 49% shareholder in Irancell after paying the €300-million licence fee.
Three days later, Minty spoke at an IAEA meeting, where the agency presented a favourable report on Iran. He noted that South Africa believed the September resolution on Iran "was not the correct course of action".
This may have been the meeting where, according to Turkcell, "MTN encouraged the South African government to take a favourable position toward Iran's civil nuclear power development programme".
Three days later, MTN stated that Irancell had been formally awarded the mobile operator licence. The company launched the next year, in October 2006. In 2008, Turkcell launched arbitration proceedings against the Iranian government.
Its subsidiary, the East Asian Consortium, launched separate arbitration against the Iran Electronic Development Company, its former partner in Turkcell, for violating a shareholders' agreement.
In September 2008, the US Treasury's Office of Foreign Assets Control placed one of MTN's Irancell partners, IEI, on a list designed "to combat the proliferation of weapons of mass destruction".
This "blocks the property of persons engaged in proliferation activities and their support networks". The company allegedly manufactures electronic components for Iran's weapons systems.
IEI, reportedly wholly owned by Iran's ministry of defence, was also sanctioned by the European Union in June 2008 as well as under the US Iran and Syria Non-proliferation Act in December 2006.
MTN's other partner in Irancell, the Mostazafan Foundation of Islamic Revolution, is purportedly a charitable body designed to benefit veterans of the Iran-Iraq war of the 1980s.
It is one of the biggest holding companies in the Middle East, managing about 400 concerns.
US and UK sources have linked the foundation to "weapons of mass destruction" procurement. This could not be substantiated.
Contacted by the M&G, Minty said MTN had not put any pressure on him: "At no point did they approach me to influence me in any direction."
He said South Africa's position on Iran at the IAEA was "very consistent".
"I don’t know what Turkcell knows. We weren’t pushed by anyone."
Click here to read the full, unedited speech.
