It is reported that Wescoal Holdings and Wescoal Mining have applied to the North Gauteng High Court to set aside the application for the winding up of Wescoal Mining.

At the end of October 2011, BSM Mining, which is entitled to mining royalties from Wescoal, applied for the liquidation of Wescoal Mining.

Wescoal said that the relief was sought on the basis that the winding up application is an abuse of the process of court and that it is part of a strategy devised by BSM Mining and its director Mr Boy Simon Mdau to embarrass Wescoal and extort payment of a debt.

The main points in Wescoal's application are that the amount claimed is for ZAR 84,146 and the debt claimed by BSM Mining is disputed as BSM Mining has claimed VAT on the royalties, which it was not entitled to do.

It said the VAT number appearing on BSM Mining's invoice is not registered with SARS and is invalid, BSM Mining is not registered for VAT with SARS, the royalty determined in terms of the Royalty Agreement is fixed at ZAR 2.46 per tonne mined and does not allow for an additional 14% to be added thereon and Wescoal Mining is not insolvent and has made a substantial operating profit for the six months to end August 2011. The matter was placed on the urgent Court roll on November 3rd 2011.

Wescoal said that "Regrettably the judge ruled that application is not urgent and that the matter should take its normal course through the court."

Wescoal added that it has evidence that BSM Mining is acting in concert with Sutha Civils who have jointly and severally embarked on a program since March 2011 to embarrass and harass Wescoal and elicit shareholder concerns. It said that "This is evident from the fact that the full application for the liquidation of Wescoal Mining was hand delivered, by an individual who wished to remain anonymous, to a local business publication on the morning of October 28th 2011 after only being lodged with the North Gauteng High Court."

It said that "The board of Wescoal recognizes that the events since March 2011 have impacted on investor confidence. Planned announcements over the next few weeks together with the group results due on November 24th 2011 will go a long way in restoring confidence in Wescoal and its shares."

Wescoal will still proceed with the application against BSM Mining through normal court channels as Wescoal remains convinced that the allegations brought by BSM Mining have no substance at all.

(Sourced from www.miningmx.com)