Controversial Partners taint Meikles key Mining venture

via Controversial Partners taint Meikles key Mining venture  The Zimbabwe Independent by Chris Muronzi

MEIKLES Africa Ltd’s mining venture risks being tainted after it emerged this week that its mining partner – Centar Asian Resources – is owned by an assortment of controversial and powerful global business figures who have been linked to the scramble for mineral resources worth several billions of dollars in war-torn Afghanistan, businessdigest has established.

Well-placed sources this week said a director of Centar, Richard Williams, who has been in and out of the country touring various mining assets with a view to help raise funding, acquire and add value to the mining companies the UK-based firm had identified, is a former high ranking British officer. Williams served with the UK’s Special Forces, the 7th Armoured Brigade (as the Brigade Chief of Staff), the paratroopers, infantry, and on the Directing Staff of the Joint Services Command and Staff College. This service enabled him to participate in military operations in Northern Ireland, Bosnia (with UNPROFOR), South America, Kosovo, Macedonia, Afghanistan, Iraq, Lebanon, West Africa, and the Horn of Africa, as well as numerous UK mainland-based counter-terrorist operations. He was in active command of troops during all of these deployments, with the exception of his time in Kosovo, where he served as Chief of Staff of the Multi-National Brigade (Centre) and wrote a manual on offensive doctrine for Peace Support Operations.

Sources said Zimbabwean authorities are suspicious of the British investor, given his role in Afghanistan and other troubled countries and as most of his fellow executives have military backgrounds in the Rhodesian Selous Scouts regiment and the British SAS respectively. Williams, who retired from the British army in 2008 when it was largely felt he was headed for the very top, sits on boards of various companies around the world.

He is a non-executive director of a listed mining company, Gem Diamonds Ltd which he joined in February 2008, a founding member of Central Asian Resources Ltd, a mining investment company focused on Central Asia, was CEO of Afghan Gold and Minerals Company, a company that had vast exploration and mining rights in Afghanistan. Williams is also the founding director of Henderson Risk Limited, a private UK and Africa based risk management business focused on developing new defense and security technologies.

Centar was founded in June 2011 by Ian Hannam, the former JP Morgan Cazenove rainmaker who was fined by the Financial Services Authority over market abuse allegations and irregular share dealings in London Stock Exchange- listed companies earlier this year and was unceremoniously forced to step down from JP Morgan bank.

Hannam holds 45% of the company and has brought in a number of prominent investors, chief among whom is Jan Kulczyk, reputed to be Poland’s richest man, Peter Hambro, Clifford Elphick, founder and chief executive of Gem Diamonds and Chip Goodyear (former CEO of BHP Billiton). Investors in the company also include Joshua Fink, the son of Blackrock founder Larry.

Kulczyk’s company, Kulczyk Investments, owns 28% of Centar and Kulczyk is chairman of the company. So far, they have injected US$40m (£25m) into the Centar.

But reports this week said Centar Mining was ready to invest up to US$500 million. Hannam was drawn into the prospect of developing Afghanistan’s mineral wealth, initially by the US State Department which was keen to help promote foreign investment in that country.

Apart from Williams’ military backgrounds, sources say the other directors have served in the Rhodesian army and its notorious Selous Scouts regiment links, something sources in the mining industry said was a concern to most of the companies Centar was talking to amid fears such firms might be misconstrued by President Robert Mugabe’s regime, which is blatantly anti-British.

Meikles Africa Ltd last year announced the formation of Meikles Centar Mining (Pvt) Ltd, a partnership with Centar. This comes a few days after Meikles said its partners had raised US$500 million in capital for the mining venture. Addressing shareholders at the company’s 76th annual general meeting this week, one of the company’s directors, Mark Wood, said Meikles would have 51% shareholding in the new company while Centar mining will hold 49%.

Shareholders approved the joint venture and establishment of Meikles Centar Mining Ltd.

“Before the elections they (Centar) sent us a partner with US$500 million capital. The partner came, but we didn’t finalise anything as all things went into elections mode. Now, we want to see who will be the next (mines) minister who we will have to talk to,” Wood said.

The partnership, according to Meikles, has already been approved by the Indigenisation ministry and the investment authority while it was yet to be approved by the Competition and Tariffs Commission.

“We took our potential investors to the Indigenisation ministry and they were happy with what we are trying to do,” he said.

The deal would see the company mining close to seven minerals in the country, including gold, tantalite and iron ore.

Wood said the country has a lot of distressed gold mines, some of them under care and maintenance. Meikles said Centar was supported by prominent and experienced investors from countries such as Thailand, Indonesia, Poland and Kazakhstan. Meikles announced last year that it had submitted applications to exploit opportunities in the Zimbabwe’s resources sector, with the first mine expected to be operational in 2014. Meikles’ executive chairman John Moxon, once targeted by Zanu PF bigwigs during the controversial Kingdom Meikles Africa Ltd demerger saga and for externalisation of foreign exchange, reportedly played an important role in the acquisition of an assortment of single and double-cab 4×4 vehicles for the now ruling party, including several Toyota Hilux, Nissan NP300, Ford Ranger and Mazda BT50 off-road vehicles. Curiously, around the same time, Moxon’s flagship company Meikles Africa Ltd, formed a mining arm, Meikles Resources (Pvt) Ltd, and applied for a diamond mining licence which was being considered by the Mines and Mining Development ministry, with government’s Zimbabwe Mining Development Corporation(ZMDC) as a possible partner in a joint venture. In the Meikles group’s interim results for the period to September 30 2012, Moxon said profits from Meikles Resources were expected to exceed those anticipated for the entire group over the coming years and would therefore be of material significance.

It is still not clear whether the Meikles vehicle donation was linked to the company’s application for the diamond mining licence although sources said this could not be ruled out.

Efforts to reach Moxon and Williams proved fruitless at the time of going to press, while other efforts to reach Meikles Africa FD Onias Makamba were also in vain as his mobile phone went unanswered. Text messages to his mobile phone had not been responded to at the time of going to press.