More Zim assets face seizure abroad

via More Zim assets face seizure abroad – DailyNews Live 17 July 2015

HARARE – Zimbabwe faces more economic woes, including having its assets abroad seized, after cash-strapped State mining company, Zimbabwe Mining Development Corporation (ZMDC), lost the latest instalment of a long-drawn legal case, at the centre of which is compensation for a lost concession by Mauritian Mining Company Amari Holdings.

This follows the International Court of Arbitration’s (ICA) ruling that the ZMDC caused Amari Holdings damages of $54 million and the ICA’s order that the parastatal reimburses Amari the money.

Dissatisfied with the ruling, ZMDC approached the Zambian High Court for an injunction against the order, which was recently turned down with costs — effectively leaving Zimbabwe with no option but to settle if the country’s pariah status is not to be cemented.FROM P1

Zimbabwe is a signatory to the New York Convention where it has assured the international community that it would recognise and make good on International Arbitration Awards.

Legal and economic analysts who spoke to the Daily News yesterday said while the ZMDC’s defeat in the arbitration challenge meant that “there was nowhere else to go after this”, the bigger problem for Zimbabwe was that this could affect both aid assistance and critically-needed fiscal support for the country by Bretton Woods institutions, because of the continued refusal by authorities to settle the matter.

But even more ominously for Zimbabwe, well-placed sources told the newspaper that so fed up were Amari with “the whole sordid matter”, that the company was planning to launch proceedings to attach struggling Air Zimbabwe’s planes in South Africa, which would effectively sound the death knell for the troubled national flag carrier, as the Harare-Johannesburg route is its only profitable route.

It was also revealed that Amari was, in addition, “doing everything in its power to gain justice” — including taking its case to international fora — which will severely damage Zimbabwe’s already battered standing as a pariah State.

“Seizure orders have already been obtained all over the world in this regard. Amari has also been in consultation with the International Diamond Board to challenge Zimbabwe’s Kimberley Process-approved status. That is how serious this matter has become,” one of the sources privy to the goings-on said — adding that these were not “idle threats”.

Belgian authorities seized Zimbabwean diamonds worth about $45 million awaiting an auction in Antwerp in September last year, following a court order in Belgium.  Although the diamonds were returned on legal technicalities, these have been addressed by Amari and similar court orders have since been obtained in jurisdictions where diamond auctions are held.

Sources say it’s the ZMDC’s fear that similar diamond consignments may be seized abroad that has moved them to have all diamond auctions held in Zimbabwe, rather than the lucrative markets of Dubai and Belgium — amid suggestions that diamond buyers are paying up to 40 percent less for the diamonds in Zimbabwe as a result.

The judgment in Zambia that rejected the ZMDC’s injunction application has not just left  Harare with red faces, but also means that there is no other legal route still open for the parastatal and the Government of Zimbabwe on this matter.

At the centre of the dispute is Amari’s acrimonious departure from Zimbabwe in 2010 when the government cancelled its right to operate its Serui platinum concession on the Great Dyke — a range of mountains and hills that run down through the centre of Zimbabwe — after the company had spent millions of dollars exploring and identifying an economically viable resource of 18 million ounces of platinum group metals.

It is also feared that the current government’s attempt to force through the merger of diamond firms operating in the country could also spur foreign investors involved in the industry to pursue similar action externally, as that taken by Amari, if the merger quest is not handled carefully.

The ZMDC operates joint ventures in the Marange diamond fields with the likes of Anjin Investments and Jinan Mining — while the parastatal is also active in the area on its own through its wholly-owned firm Marange Resources.

It also has interests in several other mining operations in copper, gold, asbestos and other minerals, and has been instructed by the government to revive several closed mines in the country — including Mhangura Copper Mines and Kamativi Tin Mine — although the question of where it would get the resources to do so has not been addressed.

In the meantime, it has been reported that the ZMDC is practically insolvent after it was recently revealed that the parastatal had a working capital deficit of $128 million for the year ended December 2013 — and notwithstanding its myriad investments.