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Judge finds signs of fraud in lithium licence process

The minister of mines and energy, Tom Alweendo, has evidence that could prove lithium exploration and mining company Xinfeng Investments obtained a mining licence for an area in the Erongo region through fraud, a judge said in the Windhoek High Court yesterday.

Acting judge Ramon Maasdorp said this in a summary of reasons for his finding that although the minister had evidence showing – until proven otherwise – there was fraud on the part of Xinfeng Investments when it applied for a lithium mining licence, Alweendo did not have the power to revoke the licence he granted the company in September last year.

Maasdorp said without a court order setting aside the licence, Alweendo did not have the power to himself revoke the licence he granted Xinfeng.

The judge ordered the minister not to implement his decision to revoke the Chinese-owned company’s mining licence for an area near Okombahe in the Erongo region.

Alweendo has filed an application at the High Court in which he is asking the court to review and set aside his decision in September last year to grant Xinfeng a 20-year mining licence.

His application is pending before the court.

He filed that application after Xinfeng in May launched an urgent application in which the company asked the court to order that the minister, the mining commissioner in the Ministry of Mines and Energy and the environmental commissioner in the Ministry of Environment, Forestry and Tourism may not implement the minister’s decision to revoke the company’s mining licence.

Alweendo informed Xinfeng on 28 April he was revoking the company’s mining licence due to “misleading, untrue and incorrect information” in the company’s application for the licence.

He also directed the company to stop all operations conducted under the mining licence by the end of May.

The area for which Xinfeng Investments received mining licence ML 243 is situated near Okombahe, west of Omaruru.

Xinfeng, which has also obtained control of a lithium exploration licence over an area south of Brandberg in the Erongo region, has faced claims that it is exporting large quantities of lithium ore from Namibia to China, instead of processing the ore in Namibia.

According to the company, it is still in the process of constructing a lithium processing plant in Namibia.

In its court application, Xinfeng Investments claimed Alweendo’s decision to revoke its mining licence was “unlawful, invalid and unconstitutional”, was also irrational and arbitrary, and was not based on the powers given to the minister of mines in terms of Namibia’s Minerals (Prospecting and Mining) Act of 1992.

The company also said after Alweendo granted Xinfeng a mining licence for a period of 20 years on 6 September last year and the company confirmed that it accepted the terms of the mining licence, Alweendo’s decision was final and he could not revoke his own decision.

In the counter-application he filed, Alweendo is asking the court to review his decision to grant Xinfeng a mining licence, and to set the decision aside as a nullity.

In the alternative, Alweendo is asking the court to declare that his decision to grant the company a mining licence “is unlawful, null and void, on the ground that it was obtained through fraudulent misrepresentation, alternatively on the basis of misleading information”.

According to Alweendo, it was discovered that a technical report Xinfeng submitted to the mines ministry in March last year, which was required for the company’s mining licence application, contained false or misleading information, and that parts of it were plagiarised.

Alweendo alleges in an affidavit filed at the court that material plagiarised in the technical report includes a report drafted for a company involved in lithium exploration work south of Karibib, a doctorate degree thesis submitted by a student at the University of the Witwatersrand in South Africa in 2014, and a report on a lithium mining project in Nevada in the United States of America.

The reports he had to take into account before he decided to grant Xinfeng the mining licence “contained material misrepresentations” and were fraudulent, and this destroyed the legal validity of his decision to grant the licence, Alweendo states.
Xinfeng is disputing that the reports it submitted to the ministry were false, or that the company was aware they were false or intended to mislead the minister.

Mines ministry spokesperson Andreas Simon said in a statement yesterday the ministry respects the court’s decision and would abide by it. Since the matter is still pending in court, the ministry would not make further comment on it, Simon added.

Xinfeng was represented by South African senior counsel Vincent Maleka, assisted by Thai Scott, on instructions from Nambili Mhata when oral arguments in the case were heard by Maasdorp on 23 May.

Gerson Narib, instructed by government lawyer Janseline Gawises, represented Alweendo and the other respondents.