Coal mining company Liberty Coal has launched proceedings out of the Mpumalanga division of the High Court of South Africa against another mining entity, in relation to alleged illegal mining operations on the Optimum Coal Mine mining right areas.

In two separate sets of legal proceedings filed, Liberty Coal is claiming damages of just over R600-million from the other entity for the intentional, wrongful and unlawful conduct in relation to the extraction, processing and sale of about 900 000 t of coal from or about April 1, 2023, to March this year.

Liberty Coal says about 850 464 t of the 900 000 t of coal mined by the other entity had been mined while 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, discharged by a settlement agreement per order of court on February 1, the company points out.

The preservation order ordered the preservation of the property of Optimum Coal Mine and the appointment of a National Prosecuting Authority- (NPA-) appointed Curator Bonis who was tasked with assuming control of the property, taking care of and administering it and undertaking any act necessary to preserve the property while the preservation order was in force, pending a forfeiture order which would have resulted in the Optimum Coal Mine being forfeited to the State.

The performance and exercise of the Curator Bonis’ duties terminated upon the discharge of the preservation order this year and the settlement reached between Liberty Coal and the National Director of Public Prosecutions (NDPP) paved the way for the assets, business and compromised liabilities of Optimum Coal Mine to be transferred to Liberty Coal in terms of the business rescue plan and in accordance with the sale and purchase agreement under which the company acquired all of Optimum Coal Mine’s assets and business.

While still tasked with the powers and functions of preserving the Optimum Coal Mine property, the Curator Bonis ordered the other entity to cease illegal mining operations in September 2023, which Liberty Coal says the entity did not abide by.

It says this interfered with the performance the Curator Bonis’ functions and powers, which carries a risk of a fine or imprisonment.

Liberty Coal says the continued illegal mining activities and the extraction of 900 000 t of coal on Optimum Coal Mine’s mining area since April 2023 have caused a R600-million loss to Liberty Coal and its stakeholders.

It says that these funds could have been used by Liberty Coal to rehabilitate the mine, pay off Optimum Coal Mine’s creditors in terms of the business rescue plan, benefit the employee or community trusts or pay Liberty Coal’s obligations to the NPA in terms of the settlement of the forfeiture proceedings.

Liberty Coal says it will, in due course, seek to engage with the NDPP and the Curator Bonis to understand why no action was taken to protect the assets under preservation.