‘We did nothing illegal’ – Kego Mining’s response to R600m lawsuit from Liberty Coal

Former Gupta-owned Liberty Coal claims nearly 900 000 tonnes were illegally mined.

Liberty Coal, recently taken out of business rescue, is claiming damages of more than R600 million from Kego Mining for illegally extracting about 900 000 tonnes of coal from its property.

Kego Mining has fired back, saying it was conducting mining operations with the lawful owner of the mining rights, Woestalleen Holdings, now in business rescue. Woestalleen’s mining right later passed to Balmoral.

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Kego says the area it was mining falls outside a preservation order granted in favour of the National Prosecuting Authority (NPA) in March 2023. This fact is fortified by the granting of the mining right to Balmoral by the Department of Mineral Resources and Energy (DMRE).

All its mining activities were conducted in full view of the DMRE, the former court-appointed curator, and Liberty Coal itself.

Optimum Coal Mine

Liberty Coal has assumed control of the old Gupta-owned Optimum Coal Mine and recently started exporting through the Richards Bay Coal Terminal.

Read: Optimum Coal to exit business rescue after six agonising years Optimum Coal Mine was paid for with criminal funds Optimum Coal’s relaunch halted by dispute over Richards Bay export entitlement RBCT reopens coal exports to Optimum Coal

Two claims have been filed in the Mpumalanga High Court by Liberty Coal alleging that Kego Mining unlawfully extracted, processed and sold nearly 900 000 tonnes of coal from about 1 April 2023 to March 2024.

It says the revenue lost through illegal mining could have been used to rehabilitate the mine, pay off Optimum Coal Mine’s creditors, benefit community members, or for Liberty Coal’s obligations to the NPA in terms of the settlement of the forfeiture proceedings.

‘Blatant’ disregard of curator demand

“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,” says Liberty Coal in a statement.

The March 2022 preservation order put a freeze on mining activity and appointed a curator bonis to administer and run the property.

The preservation order was discharged in 2024 when a settlement was reached between Liberty Coal and the National Director of Public Prosecutions (NDPP), paving the way for the assets, business and compromised liabilities of Optimum Coal Mine to be transferred to Liberty Coal in terms of a business rescue plan.

The curator demanded Kego Mining cease illegal mining operations in September 2023 – a demand “which Kego Mining blatantly ignored”, thereby breaching the law and interfering with the performance of the curator’s functions and powers, says Liberty Coal.

It claims these actions violated the Prevention of Organised Crime Act (Poca).

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Not so, says Kego

Kego Mining has a different version, saying no steps were taken by the DMRE, the former curator acting on behalf of the NPA, or Liberty Coal for Kego Mining to cease the mining activities.

“The mining activities conducted by Kego Mining were conducted lawfully and with due regard to environmental stewardship and social responsibility,” Kego Mining responded in a statement.

“We remain committed to transparency and compliance with all applicable laws, including those regulating mining rights and environmental management. Kego Mining values its partnerships with stakeholders and continues to prioritise responsible mining practices that contribute positively to the communities and economy in which we operate.”

The claims made by Liberty Coal and Woestalleen Holdings are baseless, adds Kego.

“In the legal proceedings launched by Liberty Coal in 2024, Liberty Coal is unable to produce proof that Liberty Coal is the holder of the mining right over the mining area,” it said.

“The legal process is sub judice. Kego Mining respects the authority of the courts and the pending legal process.”

Kego says it ceased its mining activities on 24 October 2024, pending resolution of disputes between the parties.

Liberty Coal says it will engage with the NDPP and the curator to understand why no action was taken to protect the assets under preservation while it awaits the outcome of any action by the NPA to recover the unlawful proceeds resulting from Kego Mining’s illegal and unlawful dealings.

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