By John Chimunhu|
Zanu PF’s attempts to seize the lucrative Mimosa Mining Company under the guise of black empowerment has hit a brick wall after the near-bankrupt government of Robert Mugabe failed to raise the required cash.
Company documents seen by Now Daily show that there has been “no progress” since the government and the company signed a ‘term sheet’ preliminary agreement to start negotiations in December 2012. Apparently, government, through the discredited National Indigenisation and Economic Empowerment Board (NIEEB), which is facing corruption allegations, has failed to raise $551 million required to buy a 51 percent stake in the Zvishavane-based platinum miner.
One of the joint venture partners in Mimosa, Aquarius Platinum Ltd of South Africa has since told investors that they have encountered unspecified problems in their negotiations with the Zimbabwe government.
“On 14 December 2012, a non-binding indigenisation term sheet was signed,” Aquarius said. “The term sheet sets out the key details of the indigenisation plan and paves the way for the drafting of detailed agreements that will facilitate the implementation of the plan. No progress has been made beyond the term sheet signed and discussions are still in progress.”
Despite the stalled deal, Zanu PF is now demanding more than $5 million from the company, the reported balance of a $10 million community share fund pledged by the company in 2011. In a letter to Mimosa last week, NIEEB chief executive Wilson Gwatiringa claimed the money was required to pay off communities in Mberengwa, which had been mistakenly excluded from the original deal. Gwatiringa did not say when NIEEB would put up the money required to buy shares.
Mimosa is said to have refused to budge due to disagreements over ownership. Company officials are also said to be dissappointed that money donated to communities was abused, with some trustees buying fancy cars and one village chief paving a road road to his remote homestead ahead of community initiatives. The chiefs, government officials and trustees handpicked by Zanu PF also allegedly looted the fund, awarding themselves ‘sitting allowances’ of $5 000 for every meeting they held, drying up the coffers with little to show for it.
Aquarius has now warned of hard times ahead as the economy unravels due to lack of outside investment and threats by Zanu PF to seize the company without paying for the shares.
“While the Mimosa mine continues to operate optimally, the Zimbabwean political and regulatory environment remained challenging for all mining companies operating in the country,” Aquarius said.
Mimosa’s production increased by three percent in the 2013 financial year which ended in June, yielding 217 871 ounces of platinum (attributable: 108 936 ounces), and realising $133 million profit from its nearly $1 billion investment. The mine is managed by Mauritius-based Mimosa Investments Ltd, which is jointly controlled by Aquarius and SA’s Impala Platinum Holdings (Implats) on a 50:50 basis.
Influential South African magazine Mining Weekly said the growth seen in the Zimbabwe mining sector from 2009 to 2012 has “ground to a halt in the face of rising inflation, a serious shortage of power that led to power outages, a brain drain and significant uncertainty regarding the Indigenisation and Economic Empowerment Act that was signed into law in 2008”.
Zimbabwe’s Chamber of Mines estimates that the country needs $5 billion to rehabilitate power, water, transport, telecommunications and border control facilities.
By John Chimunhu|