Liberty Coal lays criminal charges against Kego Mining directors for unlawful mining

Liberty Coal has laid criminal charges against Kego Mining directors Owen and Kevin Nelson, claiming they unlawfully mined and extracted coal from areas subject to its mining rights.

“The charges relate to alleged contraventions of, amongst others, the Mineral and Petroleum Resources Development Act and the Prevention of Organised Crime Act (Poca), as well as allegations of theft arising from the extraction and sale of coal without lawful authority,” says Liberty Coal in a statement.

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The claims of criminal action relate to alleged contraventions of Poca in 2023, when a preservation order had been enforced by the high court to prevent dissipation of assets. This prevented anyone from interfering with or removing property from the Mpumalanga mining site.

Owen and Kevin Nelson are claimed to have continued mining the area, despite being aware of the preservation order, and are therefore allegedly guilty of theft.

This is in addition to a commercial claim against Kego by Liberty Coal for R600 million over claims it illegally extracted 900 000 tonnes of its coal.

Liberty Coal took over the operations of the former Gupta-controlled Optimum Mine in February 2024 when the company was removed from business rescue.

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Two years earlier, in March 2022, Optimum’s business and some of its assets were preserved in terms of the Poca to prevent any possibility of assets being dissipated.

The National Prosecuting Authority alleged that Optimum and related assets had been acquired by the Guptas using the proceeds of crime.

The preservation order was uplifted in February 2024 when Liberty Coal took control of the mine and its assets, including mining rights. In June 2023, while Optimum was still in business rescue, it became aware that Kego was illegally mining its land and sent an urgent letter demanding it stop.

Kego’s argument

Kego responded that it was not mining illegally as the mining right over the relevant areas was registered to Woestalleen Holdings, which was itself later placed in business rescue.

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Woestalleen’s mining right overlaps that of Liberty Coal.

Kego claims it entered into contract mining agreements with Woestalleen, whose mining right was later vested with Balmoral Commodities, as the lawful holder of the mining rights.

Adding to Kego’s woes, Woestalleen launched an urgent interdict application in September 2024 to stop it mining on its area. The Mpumalanga High Court granted Woestalleen interim relief, and found no valid cession of mining rights had passed from Woestalleen to Balmoral.

Kego maintains it was at all times operating legally, though Liberty Coal disputes this.

In a statement, Liberty Coal says it understands that the matter is currently the subject of an active investigation by the Hawks.

“Separate civil proceedings have also been instituted in the High Court against Kego Mining, relating to the alleged unlawful mining activities and damages arising therefrom. Those proceedings remain ongoing.

“Liberty Coal maintains that compliance with South Africa’s mining and regulatory framework, including the protection of lawful mining rights and preserved assets, is of fundamental importance to the integrity of the mining sector.”

Moneyweb approached Kego Mining for comment and will update readers if such is received.

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