Strange Platinum Rumblings

ON Wednesday, Anglo American, a transnational mining company, finally reacted to media speculation over its involvement in Zimbabwe, specifically in connection with the Unki platinum project situated on Zimbabwe’s Great Dyke, the world’s second largest repository of platinum group metals, after the Bushveld igneous system in South Africa.

 

Accused of wanting to build a platinum mine costing US$400m that would somehow support Zimbabwe president Robert Mugabe, a clearly stung Anglo American attempted to deflect attention to the “wellbeing of its more than 650 employees and contractors” involved in the Unki project.

The London Times echoed the concerns of a number of parties in stating that the proposed Unki investment “is believed to be the largest foreign investment in Zimbabwe to date, just as the British Government puts pressure on companies to withdraw from the country”.

Anglo American CEO Cynthia Carroll has taken some flak over the corporation’s stance on Zimbabwe. Anglo American holds a primary London listing, and, as such, is expected to comply with UK pension fund ethical guidelines.

Legal & General, Anglo American’s largest single shareholder with a stake of about 5%, was quoted as saying that “we have a corporate and social responsibility policy and that overrides all investment activity”.

Anglo American’s announcement on Wednesday did not mention Johannesburg-listed Anglo Platinum, the 76%-held Anglo American subsidiary that houses the Unki project.

The Unki project is already boiling in scandal for other reasons. In April, London-listed Camec announced that it had acquired an interest in “platinum mining assets in Zimbabwe” via the acquisition of 100% of Lefever, a British Virgin Islands company.

Lefever owns 60% of Todal, a Zimbabwean company, “which in turn has the rights to certain platinum concessions in Zimbabwe”.

The remaining 40% of Todal is held by the Zimbabwe Mineral Development Corporation (ZMDC), the Zimbabwean State-owned mining company.

The key assets held by Todal are the Bougai and Kironde claims, previously held by entities controlled by Anglo Platinum.

For Lefever, Camec agreed to pay US$5m cash, plus 215m new Camec shares (currently worth US$233m).

Camec also agreed to loan US$100m to Lefever (to be repaid from the ZMDC’s share of dividends from Todal).

Neither Camec nor its paid representatives have been prepared to disclose the see-through identity of Lefever, but international media have noted that the transaction took place when a Chinese arms shipment was about to dock on African shores with goods destined for Zimbabwe.

When asked about the background to Camec acquiring two Anglo Platinum concessions, Anglo Platinum finally stated on April 22 that it still owns and continues “with some development at Unki”.

It turns out that Anglo Platinum entered into a deal with the government of Zimbabwe “that will result in the cession of certain claims to government, in exchange for indigenisation credits”.

The cession of the claims, Bougai and Kironde, Anglo Platinum said, did not affect the development of Unki.

However, the latest Anglo Platinum annual report stated that as of December 31, 2007, “Anglo Platinum envisages a 51% controlling share in the Unki Platinum Mine”.

It appears that the game shifted from negotiating stakes in the overall Unki project, to Anglo Platinum sacrificing Bougai and Kironde.

There is no indication that Anglo Platinum was paid a penny for the sacrifice, but there is public evidence that some faceless person/s has benefited to the tune of more than US$300m, in cash and near-cash.

Camec made some prominent investment headlines last year when it made a (later failed) bid for London- and Toronto-listed Katanga Mining.

At the time, Camec, directed by executives Phillipe Edmonds and Andrew Groves, was battling Dan Gertler over Mukondo Mountain, a significant cobalt-copper deposit in Katanga Province, Democratic Republic of the Congo.

Camec apparently acquired its Mukondo stake from well-known Zimbabwean Conrad Muller “Billy” Rautenbach, while Gertler bought his stake from ex-Zimbabwean John Bredenkamp.

The parties made peace earlier this year after Gertler vended his stake in Mukondo into Camec, in return for a substantial stake in Camec.

This time around, Camec may find itself in a battle with Anglo American, over Unki.

Time will tell if Bougai and Kironde were the eyes plucked out of Unki and handed on a plate to Camec.

If nothing else, Anglo Platinum’s activities at Unki had long moved beyond the greenfields stage.

With development of underground declines ahead of schedule, Anglo Platinum intercepted the orebody at Unki in September 2007, and initiated the startup of a stockpile.

Anglo Platinum had long settled on Unki as a 120 000 ton a month operation, with both mine and concentrator built to allow expansion.

The concentrate would be transported to Anglo Platinum refinery facilities in Polokwane, South Africa.

Construction of the concentrator is yet to start up.

On Wednesday Anglo American stated that Unki, “in development since 2003, is a long-term investment for a mine which is yet to start production and will not generate revenues for some years”.

By contrast, in April this year, after apparently acquiring Bougai and Kironde, Camec stated that it “believes it will be able to bring a mine into production, producing 120 000 -150 000 ounces per annum at a capital cost of approximately US$200m within 18 months”. Something clearly doesn’t add up. —Mineweb.

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