Bushveld Minerals Limited (LON:BMN) has put an end to a long running legal dispute over assets in Madagascar.
The junior mining company told investors that its subsidiary Lemur Resources has reached a settlement with Madam Rahajasoamampionona Ramiaramanana, the claimant, in respect of mining licence 4578, part of the Imaloto Power Project coal concession.
Both parties have agreed to immediately cease all legal processes, including applications or appeals previously lodged with the Madagascar judicial system. And the claimant has irrevocably undertaken to give up all claims pertaining to the mining licence 4578, the company added.
Bushveld added that the outcome not only reaffirms Lemur's ownership rights, it also confirms Lemurs longstanding belief in Madgascar as an emerging investment destination in Southern Africa.
“The settlement paves the way for Lemur to take forward the development of its Imaloto Coal and power projects,” said Fortune Mojapelo, Bushveld chief executive.
“Key to this development is the Power Purchase Agreement over which the company is in negotiations with the Madagascar authorities.
“The agreement will allow the next stage in the development of the Imaloto project to be implemented as an integrated mine to power and transmission project, providing a captive market for its coal resource and unlocking the intrinsic value in the underlying project."
IN DEPTH: Bushveld aims to be a winner with vanadium deal
WATCH: Bushveld Minerals aiming to be producer within a year
Bushveld added that the settlement agreement comes at a time when Madagascar re-enters the international investment domain after a transitional period, and it highlighted that the International Monetary Fund has recently provided Madagascar with an extended credit facility arrangement.
For the company’s own plans it needs to secure a power purchase agreement with the state owned water and utility company (JIRAMA). Such an agreement would pave the way for the project’s economic realisation.
Imaloto hosts some 136mln tonnes of coal resources. A prefeasibility study has been completed to examine the viability of generating power and transmitting the power to the surrounding areas and the strategic port town of Tulear.