Lynas faces Malawi project lawsuit

by Michael West | Nov 16, 2011 | Business

Lynas Corporation has been given until tomorrow to recognise a claim by a South African geologist over its rare earths project in Malawi, or face a lawsuit.

BusinessDay has obtained correspondence from London law firm Mishcon de Reya, on behalf of Michael Saner notifiying Lynas that unless it takes certain steps to recognise Saner’s claims over the Kangankunde (KGK) rare earths deposit, Saner take action.

The background to this dispute is that Michael Saner has orders from the High Court in Malawi – both in 2006 and 2010 – saying the KGK tenements belong to him.

For its part, Lynas says it acquired the rights legally and has a mining license from the Ministry of Mines. It has claimed ownership since 2008, even though it has been aware of the Saner claims. BusinessDay reported on Monday that Lynas offered Saner $500,000 in 2008 if he would relinquish his claim to the deposit.

The letter from Saner’s lawyers claims:

a: Lynas knew of the judgement and orders of the High Court of Malawi in Michael Saner’s favour dated 26 May, 2006, since no later than July, 2008;

b: Lynas geologist Matthew Edler visited the Registrar of the High Court in Blantyre where, on or about July 2008, he obtained a copy of the 2006 order;

c: Michael Saner flew at Lynas’ expense to Sydney in August 2008. On 21 August 2008, he met with Dr Matthew James, Andrew Arnold, Matthew Edler and Nicholas Curtis of Lynas, at Lynas’s office.

At that meeting Saner says he was offered $US350,000 by Lynas and then $500,000 to drop his claim.

BusinessDay put this claim to Lynas over the weekend and Lynas responded that it could not comment as it was subject to a confidentiality arrangement.

Further, the Saner legal letter goes on to say that even though Lynas claimed it had no knowledge of the 2010 injunction – “prohibiting the transfer of a purported licence over KGK to Lynas” – it now did have knowledge and should disclose that to the ASX.

“Lynas’s announcement to the Australian Securities Exchange appears to be misleading,” claims the letter, “We should be grateful if you could explain how the following statements are proper, accurate etc:

“”Lynas has recently received correspondence on behalf of a party claiming that, in 2003, the Government of Malawi acted incorrectly in  not renewing that party’s exploration licence over the area of the KGK tenements” – when in August 2008 Lynas already, 1, knew of and 2. discussed in detail with Mr Saner not only his interest in KGK but also the 2006 order, two copies of which they then had in their possession.”

There has been no request by the Australian Securities Exchange as yet for Lynas to clarify its position regarding the Saner claims. Lynas had no comment this morning.

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

Don't pay so you can read it.

Pay so everyone can.

Pin It on Pinterest

Share This