Billionaire-Backed Kropz Faces Crucial Water License Hearing

(Bloomberg) -- Kropz Plc, which is almost half owned by South African billionaire Patrice Motsepe’s African Rainbow Capital Investments Ltd., is set to face a crucial test next month that will determine the future of its flagship project.

Representatives of the Elandsfontein phosphate mine, which Kropz has spent at least $120 million developing, will appear before South Africa’s Water Tribunal on Sept. 11 at a hearing that may determine whether it keeps the water license it needs to develop the operation in the country’s Western Cape Province.

“The West Coast Environmental Protection Association is delighted to have a date for our appeal against the Department of of Water and Sanitation’s decision to issue a water use license” to Kropz, the association said via text message after being notified of the hearing date on Wednesday. “This is a key step toward protecting the Elandsfontein Aquifer and the Langebaan Lagoon.” The hearing had originally been set in April.

The hearing is the latest step in a five-year battle between the developers of the project and environmental activists. The activists claim that the water license being used by the operation, which has yet to begin production, was awarded improperly. African Rainbow said the claims couldn’t be substantiated and Kropz said it refuted the allegation that the “license is illegal.”

Obviously Concerned

“We are obviously concerned about it. However, we have obtained various opinions and are quite confident the decision will be favorable,” said Ainsley Moos, a spokesman for African Rainbow, which owns 49% of Kropz according to data compiled by Bloomberg. Motsepe is South Africa’s only black dollar billionaire.

If the appeal is successful it could force a halt to excavation and damage the operation, Kropz said in a statement prior to listing on London’s Alternative Investment Market this year.

Kropz said it was notified of the hearing date late Tuesday and won’t oppose going ahead with it.

Technical problems with the mine mean that production has been delayed until the fourth quarter of next year, Kropz said in June. The company is also considering phosphate projects in the Republic of Congo and Ghana.

To contact the reporter on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

To contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Jim Silver

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