08 December 2023 | 08:00 AM

Mining deal favours Limpopo first family and big business

Key Takeaways

Limpopo premier Stan Mathabatha’s foster brother has emerged as a beneficiary in a contested R3.2-billion provincial mining deal dogged by signs of executive interference.

There is no evidence that Mathabatha himself intervened, but his MEC for economic development, environment and tourism, Thabo Mokone, rejigged the Limpopo Economic Development Agency (Leda) board, changing the balance in favour of those who supported the deal.

The province effectively controls the mining company involved, Sefateng Chrome Mine, through a partnership between Leda and minority private shareholders, Bolepu Holdings.

Last year Leda representatives on the Sefateng board blocked a deal to fund and develop the mine – citing minimal benefit for the province and claiming the deal was skewed towards third parties, including Bolepu’s international parent company and their backers, Nedbank.

The dispute escalated with Bolepu applying to the high court to force Leda to approve the deal and Leda responding with accusations that Bolepu was bent on neo-colonial exploitation.

But by December key Leda directors who had opposed the deal were out, having either resigned or not had their term renewed.

Some of MEC Mokone’s new appointees were arguably conflicted, including the new Leda chair, Mpho Makwana, who is also a nonexecutive director of Nedbank.

Makwana and Nedbank denied there was any conflict. Read their full responses here and here.

However, as soon as the new board was announced the litigation was withdrawn, negotiations revived and the parties “reached a resolution” to proceed with the project.

Now an amaBhungane investigation has revealed that the mining deal would benefit a company owned by a man raised as Mathabatha’s brother, Thabo Leopeng.

Leopeng’s lawyer confirmed the relationship but denied Leopeng was a politically connected person or that Mathabatha had influence over decisions on Sefateng. His full response is here.

Neither the premier, nor the MEC, nor Leda responded to detailed questions.

Bolepu and associate companies said in a statement that their directors had “acted in accordance with the highest corporate governance standards at all times” and that they were confident the project would “provide significant socio-economic impacts for all stakeholders including the local communities”.

What happened?

 On 21 October 2019 Gerard Blaauw, a director representing Bolepu, lodged an extraordinary urgent application in the Johannesburg high court to force directors representing Leda to sign a series of board resolutions.

Bolepu is a 40% shareholder in Sefateng.  Leda, through a subsidiary called Corridor Mining Resources (CMR), is the majority 55% shareholder, while 5% is nominally held by three community trusts.

The resolutions would have committed CMR to approve a R3.2-billion credit agreement with Nedbank and to sign over the mining rights and shares in Sefateng to Nedbank as security for the loan.

It is worth noting at this stage that Bolepu is 49.9% owned by a multinational, Luxembourg based Traxys, whose interests, like those of Nedbank, are at the centre of this dispute.

Blaauw argued that CMR’s refusal to approve the loan agreements amounted to acting in bad faith.

Going underground

The core of the dispute goes back to 2015 but has morphed in significant ways.

CMR linked up with Bolepu in 2006 to prospect and later set about open-cast mining at Sefateng.

Shareholders have contributed about R100-million to get the open-cast mine going, of which CMR has stumped up some R61-million. These loans have not yet been repaid and Sefateng has paid no dividends.

From the start CMR was distanced from operations, despite its majority shareholding and major contribution to start-up costs.

Sefateng was essentially a holding company and Bolepu was responsible for the day-to-day management of the mine.

The actual mining is subcontracted to a company called MTC Mining and the sale of ore to Traxys, which is ultimately controlled by the US Carlyle Group.

In December 2015, Sefateng’s shareholders – CMR, Bolepu and the three community trusts – met to finalise a proposal that the mine should go underground as the miners would soon exhaust the ore available through the open-cast method.

The Sumdev agreement

At this meeting a document was signed which came to be known as the Sumdev agreement.

It was supposedly entered into because Sefateng did not itself have the resources to construct and run the underground mine.

In terms of the agreement, the Sefateng Underground Mining Development Company (Sumdev) was appointed to construct an underground mine and Sefateng agreed that it would sell mined chrome to Sumdev.

Sumdev was 66.6% percent owned by Traxys and 33.3% by five empowerment companies, at least one of which – Thabang Thabang General Trading – appears plugged into the Limpopo political elite.

The sole director of Thabang is Leopeng, the man raised as a brother to Limpopo premier Stan Mathabatha – though that relationship was never disclosed as far as amaBhungane could establish.

Troubling features

There were several troubling features about the agreement.

It would have distanced CMR further from the underground mining project.

It assigned the responsibility to Sumdev on behalf of Sefateng to raise funding to construct the mine.

It set a price formula which left Sefateng with a very limited slice of the income, but with significant and unquantified liabilities.

In particular, it made provision for Sefateng to pay the contract miner, MTC, R580 per ton. In turn, Sefateng would receive R680 per ton from Sumdev, which would then sell the ore on the open market and pocket the profit. Though Sumdev was dominated by Traxys, smaller shareholders like the premier’s brother would share in the spoils.

That split left Sefateng with just R100 per ton.

However, during the time that the loan used to construct and sustain the mine remained outstanding, Sumdev was entitled to deduct R60 per ton to service that loan.

That left Sefateng with R40 per ton, but from this it was required to run its own management operation, pay some water and electricity costs as well as assume what the agreement calls “regulatory expenditure”, namely the payment of mining royalties, social and labour plan costs – as well as environmental costs, including mine rehabilitation.

No detailed feasibility study was done (prior to the signature of the agreement) that would quantify the risks and benefits to the various parties.

And some of those parties appear to be inherently conflicted in relation to Sefateng’s interests – meaning that there was a risk that the various intercompany transactions were not structured in a way that was fair to Sefateng (and its state-owned 55% shareholder, CMR).

Concerns raised

Even before the Sumdev agreement was signed in 2015, one director representing CMR raised what appear to be legitimate concerns about the contract.

Kabela Maroga, a chartered accountant, raised questions about the structure of the transaction.

In November 2015, she wrote to the Sefateng board asking why the mining contractor (MTC) and buyer (Traxys) were locked in for the life of the mine without a clause that allowed for renewal or renegotiation.

She said the offtake agreement was particularly concerning because, “We do not yet know … how long it will take to repay the capital, without having done a proper life of mine financial valuation.”

The agreement however provided for “suspensive conditions” that needed to be fulfilled before the agreement became fully operational.

Among these was a requirement that by 30 November 2019 Sumdev would source funding for the costs of building the underground mine.

Presumably reassured by the suspensive conditions – which included the delivery of a satisfactory feasibility study – Sefateng signed the Sumdev agreement on 18 December 2015.

Complex structures

 Given that the entire three-way mining deal was premised on accurate accounting, it is noticeable that CMR had very poor insight as to what was actually happening at the mine.

For instance, minutes of a board meeting on 11 September 2018 record Maroga complaining pointedly about the financial opaqueness of the operations.

 In 2019 matters came to a head.

On 12 March 2019 a presentation was made concerning the revised funding structure that Sumdev had come up with ahead of the 30 November 2019 deadline.

A slide on the role-players introduced Traxys as the “sponsor” – an integrated trading company, with over US$6-billion turnover and with “access to a US$1.5-billion multicurrency syndicated revolving credit facility”.

Nedbank was introduced as the project funder, with the bank aiming, according to the presentation, “to get a larger part of the revolving credit facility” with Traxys.

In other words, Nedbank wanted a slice of Traxys’s global trade finance business.

The slide explained that Nedbank required the formation of a ring-fenced entity that had no assets or liabilities other than the Sefateng underground mine. So, a new entity would be formed for that purpose.

But Sefateng (55% owned by CMR) which holds the mining right, would be the guarantor for the Nedbank loan.

If things went badly, CMR and ultimately the provincial Leda would be on the hook.

One slide mentioned that a risk factor was the “complex structure”.

CMR calls time-out

Despite the complexity, there was a rush to get the deal approved.

On 5 June 2019, Sefateng directors were persuaded to sign approval for agreements that were not yet finalised.

But the following day, CMR chief executive Kabu Nkadimeng, who served on the Sefateng board, called time-out.

He queried the approval in principle of the deal, when two studies, a legal and financial review, had not been completed.

He withdrew his support.

Nkadimeng, supported by Moroga, called for a full legal and financial review.

In response Blaauw wrote: “Unfortunately we do not have the luxury of time to conduct this review. (A delay of this nature will cost us easily R30m to R60m and we will have to retrench staff).”

On 21 June 2019, another board meeting took place.

Traxys representatives stated that the funding model and the project has been scrutinised by many competent parties including Nedbank, auditors BDO and Traxys and Sefateng should take comfort from these reviews.

In other words: “trust us” – despite the fact that BDO, for instance, had originally been called on to confirm that the model protected not Sefateng’s interests, but Nedbank’s.


That assurance was insufficient for Maroga.

On 19 August, she wrote to the full Sefateng board, noting: “Unfortunately I remain unconvinced that the commercial benefits for Sefateng and ultimately its shareholders … are fair and just. I remain of the view that the affairs of the company are being run without regard to its profitability.”

On 3 September, a special board meeting was held to discuss the letter from Maroga.

The minutes record that a majority of the Sefateng board agreed to proceed with the project but were restricted by a lack of approval from the majority shareholder, CMR, which needed to approve the loan agreement.

A resolution was passed calling for the removal of Nkadimeng, the CMR chief executive, as a director on the Sefateng board.

A significant feature of this resolution was that it was supported by the two other CMR directors on the Sefateng board – Sefateng’s chair Demetrios “Jimmy” Kourtoumbellides, and Mmantsitsi Maphutha – both siding against their colleagues Nkadimeng and Maroga.

The significance of this will become apparent.

Chepape’s frolic

Further indications of a director allegedly not acting in the interests of CMR emerged two days later – involving CMR chair Victor Chepape.

On 5 September 2019, Mofasi Lekota, then chair of Leda (the parent of CMR), sent a letter to Sefateng in which he stated: “The Board [of Leda] has recently been informed … that Mr. Chepape, has signed the Nedbank Loan agreement without a resolution of the board of CMR empowering him to do so.”

Lekota went on, “The Leda Board is presently engaging relevant authorities, including the

MEC for Economic Development, Environment and Tourism in the Limpopo Provincial Government with a view to obtain guidance in regard to the conduct of Mr Chepape. This engagement may result in the removal of Mr Chepape as a chairman and member of the board of CMR and as a member of the board of Leda…

“Meanwhile, the Sefateng Board is hereby notified that at this stage the board of CMR and the Board of Leda do not support the signing of the Nedbank Loan Agreement.”

Yet, as we shall see, it was Lekota who resigned and Chepape who survived.


On 21 October, only 40 days before the deadline, Bolepu went to court on an urgent basis to try to compel CMR to approve the Nedbank loan agreements.

On 7 November 2019, Nkadimeng, the CMR chief executive, filed a spirited defence.

Aside from technical issues, he raised deep concerns about the actual benefit of the contracts to be signed.

For instance he noted: “The scenario therefore that is being foreseen at the moment is exactly the same scenario as we have already experienced during the open cast mining process, where it appears that all the other parties who are involved in the process are making money and the dregs of the contract are then paid out to Sefateng, which is then used up by Sefateng to meet the obligations that have already been imposed on it, such as the payment of the diesel fuel component and the security at the mine component.”

And elsewhere:

“[CMR] cannot be held ransom to conclude oppressive terms with Nedbank at the threat of facing liquidation…What we are dealing with is almost like the old colonial times where tribes were given some glass beads for vast assets and were told to be satisfied with that.”

Nkadimeng also attached a legal opinion that noted: “In our view, the development agreement is one sided.”

The opinion recommended canceling the management agreement with Bolepu and that other contracts be reviewed or terminated.

On 13 November, Blaauw filed Bolepu’s replying affidavit.

His basic point was that CMR had since 2015 led Sefateng to believe that it supported the project and could not, four years later, seek to undo the provisions and pricing in the Sumdev agreement.

He did not deal with the fact that the new terms flowing from the Nedbank funding proposal fundamentally altered the Sumdev agreement anyway.

Enter Mokone

Bolepu had two weeks to arrange an urgent court date before the suspensive condition of the Sumdev agreement ran out on 30 November.

But they did not set the case down.

Perhaps they had wind of the impending board coup that would be executed by Mokone, the Limpopo MEC responsible for CMR’s parent, Leda.

Mokone, who assumed office in May 2019, advertised for a new board in July 2019 with a closing date of Friday, 16 August.

The boards of subsidiaries like CMR are appointed from among members of the Leda board.

The advert did not specify when the new board would assume office – and the existing board had been acting as an interim board since 2013.

At the end of November, the interim chair, Lekota, resigned. He refused to share his reasons for leaving with amaBhungane.

The purged and the retained

On 3 December, Mokone announced the new board.

It is notable who he retained and who not.

He retained those directors who had taken issue with Nkadimeng, the CMR chief executive: Kourtoumbellides and Maphutha.

Maroga, one of the most qualified and active board members (who had also made common cause with Nkadimeng) was not reappointed, despite being one of those who had applied following the July advert.

It’s worth considering in more detail some of those non-executive directors appointed and retained.

Kourtoumbellides, “Jimmy the Greek”, is a controversial Limpopo businessman and ANC benefactor who benefited from big provincial property tenders.

He has been politically embedded since the 1990s and was deputy chair of Leda and chair of Sefateng.

He is said to be very close to MEC Mokone and one of his new co-directors, Ronald Shingange.

Shingange is said to be a friend of Mokone, with whom he once worked in the Limpopo department of public works, roads and infrastructure.

He shares or shared business interests with Kourtoumbellides and MEC Mokone.

Chepape, who had allegedly engaged in a frolic of his own by signing the loan agreement with Nedbank, was not reappointed to the Leda board, but remains on the CMR board.

Kourtoumbellides, Maphutha and Chepape did not reply to detailed questions.


But most extraordinary was the appointment Mpho Makwana as chair of Leda, who appeared conflicted right from the start.

Makwana is the “lead independent director” at Nedbank, on whose board he has served since November 2011.

He serves as the chair: group directors’ affairs committee and on the group related-party transactions committee, so he is well versed in issues around conflicts of interests.

Nedbank is the bank extending the loan to the Sefateng underground mining project – and wants a share of the Traxys global trade finance business.

It is hard to imagine how Makwana was not conflicted – in particular when Leda board nominates the members of its subsidiary boards, including CMR.

At the time that Makwana was appointed, on 3 December 2019, there was active litigation between CMR and Bolepu, which Traxys controls.

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Nedbank admits Traxys was “an existing client of the bank on many fronts” and the bank had just signed an agreement to fund Sefateng that was central to the dispute with CMR.

But both Makwana and Nedbank deny any conflict, with the bank stating, “The size of the deal was such that it is not reported to or approved by the Board and therefore he would’ve had no involvement or influence on our funding in any way.”

Makwana echoed this in an email: “I do not serve [on] the credit committee at Nedbank. CMR matters have never in the last nine years been tabled on the board of Nedbank. So, there’s absolutely zero conflict of interest on my part.”


So perhaps it was just co-incidence that on the same day the new Leda board was appointed, 3 December 2019, Bolepu drafted an agreement to withdraw the case against CMR and pay CMR’s legal costs.

Had they received an indication that the new board would take a softer line on Sefateng?

That certainly seemed to be the conclusion drawn by City Press.

In an article dated 11 December 2019 veteran Limpopo journalist Sizwe Sama Yende reported bluntly that the MEC had removed the Leda board over the Sefateng dispute.

The story stated: “Thabo Mokone, Limpopo’s MEC for economic development, environment and tourism, has disbanded the board of a parastatal for allegedly lobbying for higher returns in a chrome mining project, in which the provincial government holds a 55% stake.”

AmaBhungane put this to Mokone’s office as part of a comprehensive set of queries. He did not respond.

However, once the new board was in place, the negotiations over the Sefateng project were revived and seemingly concluded.

A local Traxys affiliate, Richards Bay Alloys (RBA), told amaBhungane earlier this year: “Richards Bay Alloys, Sefateng Chrome Mine and Corridor Mining Resources have reached a resolution to proceed with the multi-million underground mining project…

“Our directors have acted in accordance with the highest corporate governance standards at all times [and] we have collectively worked hard to resolve all the issues raised.” (See their full response here.)

However, the coronavirus pandemic has since placed immense strain on the mining industry.

In April, the company sent us an update: “Mining operations (including Sefateng) [are] now returning slowly as per regulations… RBA is working relentlessly to secure the necessary project finance… we continue discussions with Nedbank and our local and international partners to find financial structures and solutions … to fund and start the project.”

Also read:

#EarthCrimes — Limpopo’s dirty great white elephant

Broken trust in Mapela – the people, the kgoshi and the cool R175m

Mining minister’s platinum shares: A R20m ‘conflict of interest’



Sam Sole and Greg Arde

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