Australian mining company sues Botswana

Ana Komnenic | August 16, 2013 | 10:02 pm Base Metals Battery Metals Precious Metals Africa Europe Diamond Iron Ore Rare Earth Silver Zinc 

Australia’s Mount Burgess mining company (ASX:MTB) is taking the Botswana government to court after the Minister for minerals, energy and water resources refused to re-license the firm’s zinc and silver project in Ngamiland, the country’s north-west region.

In March last year Mount Burgess applied for a two-year extension to its Kihabe project permit – which it has held since the mid-1980s – and was denied in May 2013.

But that’s not the only thing that’s got the miner all worked up: Burgess is also citing “maladministration” on behalf of the ministry because the application took 14 months to process – during which time Burgess says it spent Aus $1.2 million on the project.

The government claims that the miner “failed to carry out the ‘approved prospecting programme'” between 2010 and 2012 and did not commit enough money to the operation – a fact which Burgess disputes.

In addition to the Kihabe project, Mount Burgess holds diamond, rare earth and iron ore properties which extend into neighbouring Namibia.

Essentially, the state feels that the company is proceeding too slowly with sampling, prospecting and a feasibility study. Meanwhile, Burgess says it was not able to complete the study because grid power at the mine area would not be available until 2012.

“Upon realising there would be significant delays in the provision of grid power to the region” the company decided that “from a commercial point of view there was no point in proceeding at that stage with a feasibility study that would cost in excess of $3 million,” Burgess wrote in a statement earlier this year, adding that in total so far it had spent $14.5 million on the project.

Meanwhile the miner is accusing the government of not adhering to a three-month renewal period – a time frame which lawmakers themselves set – and extending the ultimate denial for more than a year.

After failing to resolve the matter with the ministry, Burgess pleaded with the country’s Vice President for help. In response, the company received a letter from the Minister for minerals, energy and water resources denying the request once again

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