Yesterday, civil society groups and community members from the Limpopo Province of South Africa sent a letter to over fifty shareholders and potential investors of Coal of Africa (CoAL) demanding that they reconsider their plans to support the company – and specifically the Makhado Project – in Venda, Limpopo because of the damaging impact that it will have on their ecosystem and livelihoods.
The letter, which is endorsed by 12 local groups, has been sent to shareholders and potential investors including M & G Investments (part of Prudential), JP Morgan, Deutsche Bank, HSBC and ArcelorMittal, in advance of Coal of Africa’s General Meeting of Shareholders, which takes place in central London this Wednesday, 14th December.
The text of the letter is below.
For full Gaia Foundation press release, see
The report Mine Not – Waste Not: A preliminary critique of aspects of the CoAL Makhado Colliery Project EIA and EMP is available at
Open letter to Shareholders and Potential Investors of Coal of Africa Ltd (CoAL)
12th December 2011
We represent 12 local groups from Limpopo Province, South Africa, where Coal of Africa Ltd (CoAL) has two of its four coal mining projects, one being the Makhado Project.
Our alliance ranges from communities to farmers and ranchers of all cultures and incomes, representing thousands of people whose lives are at stake due to these projects in our province.
This letter outlines the reasons why we ask you NOT to invest in Coal of Africa Ltd (CoAL), or any of their projects, including Makhado Project. Investing in CoAL would create a social, ecological and economic disaster for those of us whose homes and livelihoods would be destroyed if these projects were to go ahead.  It is a flawed investment and totally unjust.
Our analysis is based on the research we commissioned from an international expert in the impacts of coal mining. The report, “Mine Not – Waste Not: A preliminary critique of aspects of the CoAL Makhado Colliery Project EIA and EMP” is widely available  together with two of the letters written by community groups to South African government ministries, clarifying their concerns and grievances regarding the Makhado Project.
These are some of the most critical reasons why you should NOT invest in Coal of Africa Makhado Project:
1. Refusal to provide vital information to affected parties – CoAL has refused to give affected parties the Environmental Management Programme or their prospecting permit. This is unlawful as this information must be available to the public.
2. Flawed public participation process – This process has been chaotic, ad hoc and inadequate, resulting in an incomplete application process.
3. Failure to give answers to vital questions – The concerns raised by the many affected parties have not been addressed, which is building growing discontent amongst the local communities and affected parties towards CoAL.
4. No water licence and not enough water in the area – The water studies for the project are incomplete, the water licence has not been granted and, by the company’s own admission, the underground water will be decimated by 2014. This is without taking into account the other mining project’s considerable water needs or the needs of the ecosystem and the communities who depend on it for their lives.  There is not enough water for one of CoAL’s projects, let alone the others. This defies logic.
5. Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) incomplete and should therefore be rejected – By the company’s own admission, these fundamental documents are incomplete and CoAL needs more time to finalise them, for “a project of this magnitude and complexity”. None of the concerns raised by affected parties have been addressed or included in these documents. The required studies have not been completed and there are omissions of vital information and many speculative statements. Thus these documents should be rejected.  Anyway, the company has now run over the stipulated date for completion.
6. The Cost Benefit Analysis (CBA) deficient – This analysis makes unsubstantiated assumptions and does not take the severe ecological or socio- economic implications into account. Thus it completely underestimates the liabilities of the project.
7. A Bad Investment – Firstly, the communities and local groups are determined to stop this project because it will destroy their lives and livelihoods. Local resistance against the project is growing as more people come to terms with the impact that this will have upon them and their environment. Secondly, as is evident from the catalogue of omissions, CoAL is a young, inexperienced company, lacking in ability to deal with people, meet the necessary legal requirements or carry out the required research to assess the viability of a project.  This makes them a high-risk investment.
We pledge to stop the Makhado CoAL Project from going ahead. We alert you to the fact that what you might consider to be a profitable investment will cause the permanent destruction of our ancestral homes, ecosystems, livelihoods and the future options for our children. Without water there is no life. Without land we have no livelihoods.
We have a responsibility to our ancestors and to our children to stop the destruction of our ancestral lands. You would do the same if someone wanted to mine your home.  Please think about that.
Yours Sincerely
Signed by the following local groups from Limpopo Province:
Dzomo la Mupo
Mupo Foundation
Mudzi wa Vhurereli ha Vhavenda
Ndima Community Services
Thikho ya Mvelele
Vhembe Traditional Healers Forum
Cultural Biodiversity Group
Vhufa ha Vhangona
Vhembe Traditional Healers
Vhangona National Cultural Movement
Soutpansberg District Agricultural Union
Makhado Action Group
Replies to: A.M. Mudau, Dzomo la Mupo ,