via Meikles mulls acquiring gold, diamond mines | The Zimbabwe Independent by Chris Muronzi
MEIKLES Centar Mining has cast acquisitive glances at Zimbabwe mining assets amid indications the company is planning to make a grand entrance onto the country’s mining scene, businessdigest has established.
A well-placed source said Meikles Centar, a joint venture between Meikles Africa Ltd and Centar Asia Resources, was looking at acquiring gold and diamond mining assets in the country’s mining sector and had toured various assets in the country with a view to acquiring them.
The sources added Meikles Centar is planning to make an ostentatious entry into the mining sector by acquiring strategic and existing gold and diamond assets.
Meikles Centar last year tried to obtain a diamond mining licence from government but it is not clear if it was approved.
While Meikles Africa Ltd has obtained special mining grants in the Midlands province for various minerals including iron ore and chrome, the group is not in any rush to develop a mine.
Instead, sources said Meikles Centar was looking at already developed mines in the country such as Caledonia (gold), New Dawn (gold), African Consolidated Resources (ACR) (gold, diamonds)and Mwana Africa plc (gold, nickel and diamonds).
The sources said Meikles Centar’s bid for Caledonia would be problematic given the mining group is fully indigenised.
Another possible takeover target, New Dawn, whose share price has collapsed over the past couple of weeks owing to high production costs, general operational challenges and the uncertainty surrounding the company’s future given it is not yet indigenised, could be ripe for the picking.
New Dawn’s share price is trading at 0,25 Canadian cents from a 52-week high of CDN$1,21. The company is now worth a mere CDN$11,40 million, compared to CDN$55,18 million at its peak.
New Dawn owns 100% of the Turk and Angelus Mine, the Old Nic Mine and the Camperdown Mine. In addition, New Dawn owns approximately 85% of the Dalny Mine, the Golden Quarry Mine and the Venice Mine (currently not in operation), and a portfolio of prospective exploration acerage in Zimbabwe
ACR, which lost its key diamond resources in the Marange diamond fields, could also fit into Meikles Centar’s plans given its gold reserves. A likely target, sources said, would be Mwana Africa, which owns Freda Rebecca, the largest gold mine in Zimbabwe and the Bindura Nickel mines.
Sources said Meikles Centar could take advantage of its London city links to make a bid for Mwana Africa Plc given that one of Centar Asia Resources directors and founders was a high flying executive at a leading UK investment bank.
Buoyed by this, sources said, Meikles Centar might target Mwana’s Freda Rebecca and make the acquisition a spectacular entry into the mining sector.
Centar Asia Resources, which was founded in June 2011 by Ian Hannam, a 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, could muscle their way into Mwana Africa Plc.
Hannam holds 45% of Centar and has a number of other investors who collectively control close to 30% of Mwana and have close links to Centar.
Jan Kulczyk’s company, Kulczyk Investments, owns 28% of Centar and Kulczyk is chairperson of the company. So far, they are said to have injected US$40 million into Centar. Reports last week said Meikles 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.
Another director, Richard Williams, who has been in and out of the Asian country touring various mining assets with a view to helping raise funding, acquire and add value to the mining companies the UK-based firm had identified, is a former high ranking British military 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.
Apart from Williams’ military backgrounds, sources say the other directors have served in the Rhodesian army and its notorious Selous Scouts regiment, something sources in the mining industry said was a concern to most of the companies Centar had approached, amid fears such firms might be misconstrued by President Robert Mugabe’s regime, which is blatantly anti-British.
But sources said the Meikles Centar venture faces many hurdles because of indigenisation issues in the country, particularly in light of the fact that Meikles Africa Ltd itself was not a fully indigenised entity.
The sources said an acquisition of a local business that would see a foreign company emerging with a controlling stake was potentially problematic given Mugabe’s insistence indigenous players must have a controlling stake in mines.
Authorities are also worried about the background of the main shareholders who have military backgrounds in the British SAS and Rhodesian Selous Scouts. Mugabe refused to swear in a senior MDC-T figure –– Roy Bennet –– because he served as a Rhodesian Selous Scout.
Mugabe has also stepped up his anti-British rhetoric since elections, saying his government might want to take action on companies owned by British citizens such as Centar.
Others interpreted the threat as an intent to take over British firms.
The sources said should Centar make a bid to take over Mwana, an asset such as Bindura Nickel Corporation, which is currently struggling to stay afloat, could be closed until international nickel prices improve, throwing close to a thousand people on the street.
But the sources said Meikles’ executive chairperson John Moxon, once targeted by Zanu PF bigwigs during the controversial Kingdom Meikles Africa Ltd demerger saga for allegedly externalising foreign currency, will however try to pull his political strings to ensure Centar buys a meaningful gold asset.
This, sources said, could be very problematic in the current climate in which the country is pushing for significant ownership of the mining sector by indigenous black Zimbabweans.
Moxon, who reportedly played an important role in the acquisition of an assortment of single and double-cab 4×4 vehicles for the now ruling Zanu PF party, including several Toyota Hilux, Nissan NP300, Ford Ranger and Mazda BT50 off-road vehicles, is now seen as a Zanu PF sympathiser.
Curiously, around the time of the donation, Moxon’s flagship company Meikles Africa Ltd, formed a mining arm, Meikles Resources (Pvt) Ltd, applied for a diamond mining licence which was being considered by the Mines and Mining Development ministry, with government’s Zimbabwe Mining Development Corporation as a possible partner in a joint venture.
Meikles Africa itself has not fully complied with the indigenisation policy.
It is still not clear whether the Meikles vehicle donation was linked to the company’s application for the diamond mining licence. However, sources said this could not be ruled out.
Efforts to reach Williams proved fruitless at the time of going to press. Attempts to contact Meikles financial director Onias Makamba were also unsuccessful.