HomeLocal NewsMessy feud erupts over Mujuru gold mine

Messy feud erupts over Mujuru gold mine

A MESSY dispute over Indarama Mine, an operation with vast gold deposits linked to the late retired army chief General Solomon Mujuru, has erupted between a local tycoon and a multinational conglomerate, sucking in cabinet ministers and the Affirmative Action Group (AAG) in the process.

Report by Owen Gagare/Brian Chitemba

Local entrepreneur Nhamo Chitimbe, through his company Shumba Instrumentation, is battling to secure a 51% stake in the mine in which he had links since 2005 when he embarked on a joint venture for the production of antimony metalloid used in the making of bullets and bullet tracers, cosmetics, even paint and glass art crafts.

The parties agreed to a joint project before signing a Memorandum of Agreement, giving Shumba Inst first right of refusal to purchase the Kwekwe mine should it be put up for sale.

Indarama Mine –– whose owners also have interests in exploiting untapped rare blue diamonds around the Sansukwe (also written Sanzukwe) area southwest of Bulawayo on the Zimbabwe-Botswana border –– is owned by Pan Reef Company (Pvt) Ltd, which in turn is owned by Bayham Mining Ltd, whose parent company is the British Virgin Islands-registered Great Lakes Minerals Ltd listed on the Canadian Stock Exchange.

Sansukwe in Mangwe district in Matabeleland South province has diamond deposits which different companies are exploring.
The diamondiferous deposits around the area have seen exploration works that have proven the existence of kimberlites and indicator minerals.

Shumba Inst entered into an agreement with Bayham Mining in 2005, but in 2008 Great Lakes gave a management contract to Arcadia Energy and Mining Ltd (Arcem) to run Indarama and its subsidiaries, resulting in Shumba Inst being elbowed out, thus igniting a fierce battle for control.

Correspondence seen by the Zimbabwe Independent reveals the new Indarama Mine management claims it only got to know of agreements signed by the previous executives after Shumba Inst registered its complaints.

With the indigenisation programme campaign intensifying, and under pressure from the Indigenisation and Empowerment ministry to comply with regulations as well as Shumba’s demands, Indarama roped in Mujuru as a partner for protection.

A letter dated May 9, 2011 to Indigenisation and Empowerment minister Saviour Kasukuwere by Pan Reef Mining MD Richard Farrel reads: “With reference to our letter submitted to the ministry on 8 April 2011, we can now confirm that our shareholders have agreed the sale of shares to our indigenous partner, General S Mujuru (Rtd).”

“The selection of our partner was driven by the imminent requirement to participate in the mine plan submitted to the ministry of mines and mining development showing a future investment requirement of US$165 million. In order to continue with the mine development it is essential for the shareholders to fulfill their financial obligations.”

But Pan Reef Mining chairman retired Colonel Godfrey Matemachani, who is said to have been a close Mujuru associate, wrote to Kasukuwere a day later withdrawing Mujuru’s name, in what was reportedly an attempt to hide his identity since he was involved in many other indigenisation deals.

Mujuru was involved in River Ranch diamond mine in Beitbridge and tried to muscle into Zimplats, among other companies. He had built a multimillion dollar empire through the use of political influence and grabbing of assets.

“This is a formal notification for the withdrawal of the document dated 10th May 2011 that we submitted to your offices. We seek the minister’s extension of 30 days, until 10th June 2011, to finalise our consultations on our indigenisation plan,” wrote Matemachani to Kasukuwere.

Matemachani was appointed a director in Pan Reef Mining in 2010, and was believed to be representing Mujuru’s interest.

Letters have been flying between Chitimbe, Kasukuwere, Mines minister Obert Mpofu, AAG and Pan Reef, with Chitimbe demanding a 51% of Indarama Mine arguing he invested over US$750 000 in the mine and that he had the first right of refusal should the entity be disposed of.

Shumba Inst invested capital in the building of a processing antimony plant, milling circuit, holding tanks and pumps including an electrowinning circuit.

Chitimbe has been complaining about interference from bigwigs and wrote to the National Indigenisation and Economic Empowerment Board (NIEB) board, copying his letter to Kasukuwere and Mpofu in June this year, taking exception over how the matter has been handled.

“We are privy to a lot of information that suggests that the other party has never been forthright with us and it now appears that there is a tendency in the direction taken by the powers that be – that of the use of influential people to block ordinary citizens from benefiting from a very important and life changing policy (which) is not only difficult to defend but morally questionable,” he wrote. “As of now, our view is that decisions that reflect a predisposition towards the rich and famous will defeat the whole purpose of indigenisation.”

Davison Gomo, the AAG CEO, has also been fighting in Chitimbe’s corner, and instructed Farrell to comply with the indigenisation policy by ceding shares to the local businessman.

Contacted for comment yesterday, Chitimbe said Kasukuwere has been slow in resolving the matter. “It has been promises after promises. The Indigenisation ministry and NIEB are acting too slowly for us,” he said.

Kasukuwere said he was unaware of the involvement of Mujuru but said he would check what was happening at the mine before hanging up.

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