What is happening at Kombat?

Andre Neethling former Managing Director – Ongopolo Mining and Processing writes

The Kombat situation is crying out loud – a community stranded on an island hoping for somebody to rescue them from the desperate situation. The Kombat assets and resources justify a relook at the historical operations and future potential. Namibia is experiencing an alarming unemployment rate and projects such as the dormant Kombat Mine should not be left unchallenged.

Weatherly capitalised at Kombat as project expenses of close to N$200 million were reversed on the books of Ongopolo, creating a bigger tax loss for Ongopolo, due to the so-called failure of the New Asis Far West Appraisal Shaft. The Appraisal Shaft was a joint initiative between the Namibian Government, the European Union and Ongopolo to appraise the ore deposit and to identify suitable reserves for sustainable mining in the Kombat area.

The project was never completed, and since Weatherly took over Ongopolo, the shaft was allowed to flood after they removed the pumping infrastructure. The main Kombat mine flooded soon thereafter and Weatherly decided to close Kombat in early 2008. Kombat was recently sold to Grove Mining Namibia – a South African metal merchant engaged in logistics and demolishing projects. It was later discovered that an Indian consortium registered in Mauritius was the financing power behind the initiative.

They based their calculations for acquiring Kombat on the second-hand and scrap value of the infrastructure. Revival plan Weatherly announced the successful sale of Kombat for US$3 millon in the media and to my knowledge without the consent of the Government of Namibia. Weatherly tried to sell the former Ongopolo operations to a London-based company in early 2008 which was turned down in mid 2008. Later towards the end of 2009 Weatherly again tried to sell the assets – this time to a Chinese company leading to the subsequent sale of the Smelter to a Canadian-based company. Former management and workers mobilised and developed a revival plan for Kombat through a Namibian registered company – Ombo mining. Attempts to buy or swap Kombat by Namibians were turned down by Weatherly.

We later approached Grove Mining Namibia when it was made public that they were the successful buyers of Kombat. We offered to buy the Kombat asssets for a consideration of N$50 million with the objective to revive Kombat as a Namibian entity. The sales agreement between Ombo Mining and Grove Mining Namibia was based on the original sales agreement between Weatherly/ Ongopolo and Grove Mining Namibia. Grove Mining Namibia and Weatherly later refused Ombo access to this agreement –leaving us with the opinion to assume that there is something fundamentally wrong with their agreement. Grove Mining Namibia was formally notified that they are in breach of this agreement and that we demand a copy of the said agreement to conclude our due diligence.

Our European-based financiers would earn 30% equity in the project, the balance being Namibian, including Government, a workers trust, the founder members, a rehabilitation trust and an exploration company. Namibian control priority A “twenty-person strong” management team with an average of 30 years experience representing all disciplines is engaged in the revival of the Kombat mine. New job opportunities will be created for young Namibians and skills, especially in underground mining, would be transferred through practical experience and training. Our objective is to mine lead, silver and copper in the Kombat area, to dewater the underground workings in conjunction with all stakeholders in the utilisation and management of water, to complete the Asis Far West appraisal project, to support agricultural projects and to develop the Kombat community.

The number of workers at Kombat is planned to be 239 within 18 months from start up and a total of approximately 1000 people will be employed through the extended Kombat activities such as agriculture, services and maintenance. I am of the opinion that we have to regain our position as a local operator, controlled by Namibians and to develop and transfer skills to the next generation in underground mining.

The current trend of tactics and strategies by license holders trying to strike a “good deal” is unacceptable. We have the funds, the knowledge and resources - why should foreigners get the first option?

Andre Neethling
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