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(HERALD) Zim, S. Africa mining firms at loggerheads

Zim, S. Africa mining firms at loggerheads
Wednesday, 24 August 2011 02:00
Farirai Machivenyika Business Reporter

A South African company is claiming a controlling stake in a joint coal-mining venture it entered into with a local mining entity despite the cancellation of the initial agreement after it failed to meet its contractual obligations.

Lontoh Coal entered into an agreement with local mining company Liberation Mining on May 10 last year under which it would get a 51 percent stake in Lubimbi coalfields in Matabeleland North, on condition it coughed up US$100 million in capital injection.
Liberation Mining had been granted a special grant to exploit coal and coalbed methane gas in 2006 and sought partners to kickstart the project.

Documents at hand show that Lontoh chief executive Mr Tshepo Kgadima undertook to transfer the said funds within 14 days at a meeting with Liberation Mining managing director Renoir Robinson and Youth Development and Indigenisation and Empowerment Minister Saviour Kasukuwere sometime in July last year.

The deal was also subject to meeting local statutory requirements with the Reserve Bank of Zimbabwe, the Ministry of Youth Development, Indigenisation and Empowerment, the Zimbabwe Investment

Authority and any other obligations in South Africa.
Documents at hand, however, show that Lontoh failed to meet requirements to enable it to acquire the 51 percent stake.
In a letter to Liberation Mining on September 15 last year, Minister Kasukuwere notified the company's managing director that the deal would not be approved since Lontoh had failed to meet its obligations for capital injection.

"I, however, agreed to approve your request to transfer 51 percent of your equity to Lontoh Coal subject to providing an acceptable guarantee that it would invest US$100 million into your project.

"This was the level of foreign direct investment stated in your correspondence and this was confirmed by the CEO of Lontoh Coal, who assured me that he was prepared to transfer the funds to Zimbabwe.

"Several weeks have lapsed since that meeting and to date I have not received the required guarantee nor have I received any further correspondence from either yourselves or Lontoh Coal," reads part of the letter.

Minister Kasukuwere added he was not prepared to authorise the 51 percent transfer if Lontoh Coal did not provide the guarantees within seven days and advised Liberation Mining to seek alternative investors.

Liberation Mining then cancelled the agreements on October 12, 2010, through their lawyers Bruce Mujeyi Attorneys.

However, the South African company still claims ownership of the project as indicated in a presentation at the African Mining Network in Johannesburg meeting on August 11. In an interview yesterday, Mr Robinson dismissed these claims.

"Such claim is deliberately misleading and is made by a person who knows that it is false. Any person who deals with Lontoh on that basis does that at his or her own peril," he said.

Matabeleland North has vast coal and coal methane gas reserves that have been slated as part of Zimbabwe's solution to its energy problems.

The operations at Lubimbi are expected to create thousands of jobs and downstream employment once fully operational.

Labels: COAL, SAVIOUR KASUKUWERE

posted by MrK @ 3:07 AM