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Lonmin’s Bapo Empowerment Deal Edges Closer to Financial Ruin

Published September 21, 2023
9 months ago

Amid rising concerns is the controversial Lonmin empowerment deal with the Bapo ba Mogale Traditional Council, as the specially created investment company, Bapo ba Mogale Investments (BBMI), faces potential financial insolvency. The deal, designed to benefit the 40,000-strong community in the Rustenburg platinum belt, now teeters on the brink of financial disaster following a lawsuit lodged by KMC Holdings.

KMC Holdings is suing BBMI for R30-million, citing a lack of payment for services rendered over a nine-month period, and the illegal termination of a contract geared towards ore transportation. Several other unnamed companies allege BBMI owes them significant sums, contributing further to financial tensions.

Coupled with this, an email from BBMI's logistics division, dated September 19, reveals bouts of cash-flow issues dating back to early 2016, which have in turn led to the company struggling to meet its obligations to suppliers and contractors. As a result, BBMI has enlisted the assistance of the National Empowerment Fund (NEF) to aid in managing its cash flow.

The Bapo community already contends with the repercussions of the public protector’s finding that R600-million in mining royalties, accumulated since 1995 and held by the North West government, has been stolen.

The financial turmoil enveloping BBMI threatens to exacerbate existing divisions within the Bapo community, placing a strain on members who are demanding answers and so-called "ambassadors" of the tribal authority.

In an effort to mitigate the crisis, Lonmin spokesperson Sue Vey revealed that financial statements are being prepared, and hoped they would shed light on the current situation.

BBMI’s financial quandary has been attributed to CEO Lehlohonolo Nthontho and Vladimir Mogale, the spokesperson for BBMI and the tribal council. It is alleged Mogale is pulling strings behind the scenes, utilizing Nthontho – a proclaimed friend – for paperwork processes.

BBMI's precarious financial situation is again brought into question with the allegations circulating around Nthontho's true identity, escalating mistrust within members of Bapo community towards their investment company's handling and subsequent accountability.

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