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WSL
WSL
WSL - Wescoal Holdings Limited - Legal Dispute at Khanyisa Colliery
WESCOAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
JSE Share code: WSL ISIN:ZAE000069639
("Wescoal" or the Company)
LEGAL DISPUTE AT KHANYISA COLLIERY
Shareholders are referred to the article in the Business Day today regarding a
disgruntled contractor, Sutha Civils ("Sutha"), which claims R15, 2 million from
Wescoal Mining (Pty) Limited ("Wescoal Mining"), a wholly owned subsidiary of
Wescoal. Sutha has also laid a fraud charge against "West Coal Mine", it is
assumed that the fraud charge was intended for Wescoal Mining. The fraud charge
appears to relate to Sutha`s belief that there are discrepancies in tonnages
reported to the market and what was actually produced at Khanyisa. No further
information regarding this charge has been made available to Wescoal. Sutha is
threatening to apply to court for a liquidation order against Wescoal Mining
tomorrow.
Wescoal would like to advise shareholders of the following facts:
* Sutha commenced mining in February 2010 and during the period February to
July 2010 it came to the Company`s attention that there were numerous
issues relating to overcharging by Sutha;
* By July 2010 Sutha had not responded to or corrected these issues;
* During September and October 2010 there were irregularities regarding
diesel use by Sutha;
* On a mine visit in November 2010 Wescoal instructed Sutha to stop mining
overburden and only extract coal, which Sutha ignored; and
* Sutha was instructed to cease mining operations at Khanyisa in December
2010.
Wescoal has obtained legal advice that Wescoal Mining does not owe any money to
Sutha and Wescoal Mining is considering instituting a civil claim against Sutha
for approximately R3, 5 million. Wescoal Mining categorically denies
discrepancies between tonnages reported to the market and actually produced. Any
application for liquidation of Wescoal Mining is totally unfounded and malicious
and will be opposed.
14 March 2011
Johannesburg
Sponsor
Exchange Sponsors
Date: 14/03/2011 12:39:00 Produced by the JSE SENS Department.
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