via Marange sues Core Mining | The Herald by Martin Kadzere Senior Business Reporter
MARANGE Resources has obtained permission from the High Court to proceed with its US$2 billion lawsuit against Core Mining Resources and Minerals for financial prejudice after the latter allegedly misrepresented it had money to invest in a diamond mining venture. Marange, a State-owned diamond miner, is a subsidiary of the Zimbabwe Mining Development Company. It partnered Core Mining to form Canadile in 2009 to exploit diamonds in Marange.
Last week, High Court judge Justice Francis Bere granted leave (permission) to serve Core Mining, under final liquidation, with summons through the service of the Sheriff of the Gauteng High Court.
The liquidators, Selwyn Trakman and Satish Roopa, are also being cited as respondents.
Mr Lovemore Kurwoti, a principal shareholder and director in Core Mining, is alleged to have made false representations that the company was a subsidiary of Benny Steimetz Group Resources, a well established international mining company.
BSGR was to provide financial, technical and machinery support to the joint venture with Marange.
As a result, the ZMDC approved the joint venture believing that it was dealing with BSGR.
It was, however, discovered that Core Mining was not in any way related to BSGR and the international mining firm had no interest in the project. In addition, Core Mining did not have financial and technical resources required for the joint venture project.
The guarantors of Core Mining’s financial obligations were Yehuda Licht and Subrithy Naidoo, who had no connections with BSGR, nor did they have capacity to honour their guarantee. Marange, through ZMDC, then instituted an investigation to establish the extent of fraud. The joint venture was subsequently terminated in October 2010 because the agreements entered between the two were considered to have no effect from the beginning.
“As a consequence of (Core Mining) representations, (Marange) suffered serious financial prejudice in that (Marange Resources) did not receive the expected investment in value of US$200 million in the joint venture which would have achieved a return of US$2 billion,” according to court papers filed by Marange. “Had (Marange Resources) known the true facts, it would not have signed the agreements.”
Last year, a South African court granted a liquidation order against Core Mining after the company failed to settle its debts. According to papers filed at South Gauteng High Court, an applicant, Babcock Africa Services, which operates the Volvo franchise in SA, said Core Mining had failed to pay close to R11 million for equipment supplied.
Core Mining had made an application for adjournment of the liquidation hearing to allow Zimbabwean courts to finalise criminal charges against some of its directors. But the South African court ruled that a favourable outcome to Core Mining was “nebulous” and “speculative” to warrant an adjournment of the hearing.
COMMENTS
Great news and the best opportunity for Zimbabweans to take control of this disaster. Every disaster has a built-in opportunity and this certainly offer great opportunity for a group of Zimbabwean businessmen under indigenization program to revive this mining operation. Funding for such operation can be created from foreign investors without them owning the equity of the mine but sharing the profits at rates that the West can only dream of because in reality the returns on investment (ROI) in the West is running between 1 and 3% a year at the best. Can one imagine if this mining operation offers to it’s investors 5, 6, or even 7% return on their investments? Since the project is already a bona fide and certified (despite its alleged fraudulent and other irregularities) and raising capital should not pose any difficult problems. These are the kind of projects that qualified Zimbabwean people must take control of with the well planned and well scrutinized collaborations with those who can develop, run and train Zimbabweans to eventually take over and run these types of operations on their own. This is what we call BOT projects and this particular one should not be difficult to take over. Come on Zimbabweans take a chance and risk a little bit of your future on something that has so much potential so why wait?
Great opportunity for a leader among Zimbabweans who has the vision and convictions that he or she can create an able, willing and ready body of qualified Zimbabweans to take this challenge!
Ed Melik, you are so ignorant of the the situation on the ground to the extent that you are better off completely shutting up!! There is no project to run with, as soon as this Core Mining was dispossessed, the vultures, through Marange Resources, marauded the concession and its mined out and Marange cannot even pay its workers as things stand, my foot!!!