Seeking the Bengwenyama's hidden hand
Johannesburg - Call it cynicism, or perhaps a mirror of the Machiavellian culture that pervades the halls of South Africa's minerals resources department, but our first thought was that the financial adviser supporting the Bengwenyama community was actually a rival mining firm, a proverbial wolf in sheep's clothing.
The Bengwenyama, a community in North West province, has caught the imagination recently for having successfully applied to the Constitutional Court to void the mineral rights of Genorah Resources, the major shareholder of Nkwe Platinum.
On the back of this, newspapers reported undisclosed financial support had been provided to the Bengwenyama.
So what's stopping a rival mining firm supporting the Bengwenyama community as a front to its own commercial ambitions?
Didn't Imperial Crown Trading use similar mercenary techniques to pip Kumba Iron Ore [JSE:KIO] to its prospecting rights? Didn't Lonmin [JSE:LON] lose base metal prospecting rights because a competing firm spotted an ambiguity in the legislation?
In the increasingly porous world of South Africa's mining legislation, anything is possible, it would seem.
The word from the Bengwenyama, however, is that "a group of individuals", including geologists, had long offered to provide some support to them.
The motive is still unclear, but Bengwenyama's legal representatives say it "wasn't like that", meaning it's the community that will be developing the minerals - not another upstart platinum junior mining firm, heaven forbid.
We'll take that at face value for now. What is clear is that recent developments are all terribly bad news for Nkwe Platinum, which is in danger of collapsing in pack of cards style, one might say.
Chief among the criticisms heading its way is its apparent reluctance to disclose the precariousness of its control over the title to the two farms it has since lost.
Eversheds, the law firm acting for the Bengwenyama, has requested the Australian Stock Exchange to publish a notice so that shareholders in Nkwe Platinum get the full story as Eversheds sees it, but there's been no response yet from the bourse.
And what of Nkwe Platinum's proposed listing on the JSE? The local listing authority confirmed Nkwe Platinum has been discussing going public for nigh on two years without delivering any decision on the matter.
The suspicion is that Nkwe Platinum is low on corporate governance standards, and much prefers the less stringent disclosure rules of the ASX and other places where it is listed, such as the Hong Kong Stock Exchange.
The fact of the matter is that Nkwe Platinum must list on the JSE at some point, having been allowed by South African authorities to have local assets held in a foreign listed company.
Aquarius Platinum [JSE:AQP] started life with a similar structure, in which South Africans held local assets in an offshore company.
Aquarius was eventually required to "bring those assets home", in the form of a dual inward listing.
It's all terribly messy for Nkwe Platinum, which also faces challenges to its remaining mineral-bearing farms by the likes of Anglo Platinum [JSE:AMS] and African Rainbow Minerals [JSE:ARM].
Nkwe resumes trading on Tuesday. It could be a difficult day for the firm, since it's fighting a rearguard action on both financial and ethical fronts.