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Camec's Zimbabwe platinum project threatened
Brendan Ryan
Posted: Fri, 18 Jul 2008

[miningmx.com] -- ZIMBABWE'S opposition Movement for Democratic Change (MDC) intends canceling the deal struck between Robert Mugabe’s Zanu-PF led government and Central African Mining and Exploration (Camec) over its new platinum mine.

The reason is the circumstances under which Camec came to own the mineral rights to the mine, which were previously held by Anglo Platinum as part of its Unki Platinum project.

Roy Bennett, MDC treasurer-general, told Miningmx today that, when the MDC gets into power in Zimbabwe, “any deal done under the kind of circumstances surrounding the Camec acquisition of those mineral rights will be not be honoured and will be undone.”
let them try
Camec MD Andrew Groves replied: “Assuming the MDC gets into power then let them try. That deal was done in accordance with all the laws of Zimbabwe. The US$100m loan provided was used to pay off Zimbabwe’s external creditors.

“They will find the deal very difficult to undo and we will take the issue to international arbitration if necessary. This kind of thing was tried on us before in the Democratic Republic of Congo.”

According to Bennett, the MDC will come to power in Zimbabwe. “What is underway now are negotiations leading to a transitional government. That, in turn, will lead to free and fair elections which will confirm the position of the MDC as the elected government.”

Camec acquired the claims in mid-April immediately after they were surrendered to the Zimbabwe government by Anglo Platinum in terms of the country’s newly introduced indigenisation legislation.

But, according to an industry source, the rights only became available because Anglo Platinum was subjected to extreme pressure from the Zimbabwe government at a time when the state was desperate for cash.

Allegations are that the pressure included coercion in the form of visits from Zimbabwe’s Central Intelligence Organisation to various Anglo executives in Zimbabwe and that the money was used, amongst other things, to fund President Robert Mugabe’s election campaign.

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Asked about this, Anglo American spokesperson James Wyatt-Tilby said on June 26: “Negotiations and discussions had taken place during the past two years between Anglo Platinum and the Zimbabwean government and these resulted in a cession of the claims in April this year. Anglo Platinum will receive empowerment credits for this transaction.”

Camec announced on April 11 it had bought control of these claims through a company called Lefever Finance which was registered in the British Virgin Islands. Lefever owned 60% of a Zimbabwean company called Todal Mining which held the rights.

The other 40% of Todal is held by state-owned company, Zimbabwe Mineral Development Corporation (ZMDC).

Camec bought Lefever from a company called Meryweather Investments to which it paid US$5m in cash and issued 215m new Camec shares worth about $238m.

But Camec also lent $100m to Lefever to, "enable Lefever to comply with its contractual obligations to the Government of the Republic of Zimbabwe. Repayment to Lefever is to be made from the ZMDC’s share of dividends from Todal.”

Camec’s results statement for the year to end-March this week said work had already started on the site of the Zimbabwean mine. The report said, “we are confident that we can bring the mine into operation during 2009, ultimately producing 120,000 to 150,000 ounces of four element (platinum group metals) per annum.”

The Camec report added, “Todal has negotiated the right to export platinum from Zimbabwe and has also secured agreement to allow it to expatriate the profits generated by its mining operations in the country.

“In addition, the Reserve Bank of Zimbabwe has extended to Todal the same fiscal incentives that had been granted to Anglo Platinum under the special mining lease agreement for the development of the project. These incentives cover royalties, income tax, import duties value added tax and withholding taxes.”

Camec said that a management team led by Gordon Thompson, formerly the head of operations at the South Deep gold mine in South Africa, had been appointed.

Camec added it also retained its interest in Pfula Investments which owns 51% and 40% respectively of the Inkosi and Imbasa platinum projects on the western limb of the Bushveld Complex in South Africa.

Camec said it is, “Very proud of its record of investing in Africa and it believes that its approach of making early stage investments in countries in transition is the best way to generate shareholder value, while at the same time helping the people of Africa.”