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Tuesday, 14 October 2014

‘KING’S MINE’ OWES $4m, 700 JOBS LOST

Salgaocar, a mining company in Swaziland half-owned by King Mswati III, has suspended operations, owing creditors approximately E42 million (US$4.2 million).

An application has been filed in the Swazi High Court to place the company under provisional judicial management. It is reported that 700 jobs could be lost.

Salgaocar Swaziland began operations in October 2011 in controversial circumstances.

Salgaocar, an Indian-based global conglomerate, was granted a licence to mine iron ore at Ngwenya in Swaziland, within a protected area inside the Malolotja Game Reserve, despite fears that its work would pollute the water supply of many rural people and also the population of Mbabane, the kingdom’s capital.

But, the licence was granted and a company called Salgaocar Swaziland was formed with 50 percent of it owned by Swaziland, according to MetalBulletin, an industry journal. 

In Swaziland, King Mswati III is an absolute monarch and he keeps all mineral royalties in trust for the nation. In practice, he chooses how the money is used and it is mainly spent to finance his lavish lifestyle that includes 13 palaces, fleets of BMW and Mercedes cars and high-class international travel for himself, his 14 wives and other members of the Royal Family.

Salgaocar Mozambique Chief Executive Officer Ron Herman said in 2010  that he expected 200 million tonnes of ore to be extracted. Salgaocar Swaziland Chief Executive Officer Sivarama Prasad Petla said Swaziland would get a royalty of 50 US cent per tonne. 

On this basis the King stood to get US$100 million.

Now, it seems the prospects for the company might have been over-stated.

In documents filed at the Swazi High Court the company’s Director Sihle Dlamini said in December 2013, the price of iron ore started to fall ‘and this impacted negatively’ on Salgaocar’s ability to continue its operations.

He said its current liabilities amounted to approximately E42 million. He added more than 700 people could lose their jobs but this did not include the employees of ancillary service providers.

Liquidator and accountant Paul Lubenga Mulindwa has been appointed Judicial Manager of Salgaocar.

See also

PRIVATE FIRM GAVE KING HIS JET
http://swazimedia.blogspot.com/2012/04/private-firm-gave-king-his-jet.html

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