PRESIDENT Emmerson Mnangagwa’s crony Lucas Pouroulis, whose company, Karo Resources, recently signed a controversial US$4,2 billion platinum deal with government, has grabbed mineral claims stretching over 23 903 hectares previously held by Zimplats along the resource-rich Great Dyke, the Zimbabwe Independent reported.
The concessions were grabbed despite the fact that some locals, in conjunction with Russian and Chinese investors, are holding claims on the Great Dyke for speculative purposes over many years.
Pouroulis has been eyeing the Great Dyke deposits for some time. In 2013, he wrote to then Mines minister Obert Mpofu seeking permission to exploit the claims.
Karo Resources forged the multi-billion dollar deal with government last month, amid concerns that Pouroulis, who is a well-known speculator, was manoeuvring to snatch the vast platinum claims for speculative purposes.
In 2005, he made a fortune after acquiring South Africa’s Impala Platinum subsidiary Elandsfontein Platinum Project for US$15 million, before selling it two years later for US$1,1 billion to Xstrata. Karo Resources is registered in Cyprus and Guernsey, a tax haven blacklisted by the EU in December last year. The shady platinum deal was inked at Mnangagwa’s Munhumutapa offices in Harare by Mines minister Winston Chitando and Pouroulis.
Zimplats, a subsidiary of Implats of South Africa, was arm-twisted by government to cede part of their vast claims along the Great Dyke, with the fear of being muscled out of the sector Chiadzwa-style, forcing the company to the negotiating table.
Zimplats’ mining lease was due to expire in August 2019. Government, without notice, in 2016 terminated the diamond mining rights of seven companies operating in Chiadzwa.
In 2016, government approached the courts seeking to compel Zimplats to surrender its unutilised claims to pave way for new players in the lucrative sector.
In a statement on Wednesday, Implats confirmed it had ceded its claims to government to pave way for the licensing of “other investors” in the sector.
The statement did not reveal who had benefitted from the concessions.
“Implats has regularly kept the market informed of developments with regards to the government of Zimbabwe’s intention to compulsorily acquire land measuring 27 948 hectares within its subsidiary Zimplats special mining lease area,” the company said.
“Implats is pleased to advise that Zimplats has agreed to release to the government land measuring 23 903 hectares within Zimplats mining lease area in support of the government’s efforts to enable participation by other investors in the platinum mining industry of Zimbabwe.”
Sources closer to the deal say Implats decided to negotiate with government rather than fight through the court because of the risk of being kicked out of the country.
“You must remember that Zimplats was given a special mining lease by government which was going to expire in 2019,” a source said.
“So there were fears that government was going to terminate their mining licences in the manner it cancelled the licences of diamond companies in Chiadzwa when the mining lease expired.”
Under the Zimplats-government arrangement, the platinum miner has been allocated two mining leases within the land area stretching over an estimated 25 000 hectares. The mining claims are valid for the life of mine.
“Consequently, the operating subsidiary applied for and was granted with effect from 31 May 2018, two separate mining leases over the two pieces of land measuring 6 605 hectares and 18 027 hectares respectively. These mining leases replace the special mining lease held by Zimplats, which was due for renewal in 2019,” Implats said.
Zimplats was previously arm-twisted by government to cede claims which were later allocated to speculators.
In 2014, Pen East Mining Company, an entity linked to the military, entered into a joint venture dubbed the Great Dyke Investments (GDI) with Russian firms namely VI Holdings, Rostec and Vnesheconombank in a US$4 billion platinum investment deal that was supposed to create 8 000 jobs and increase Zimbabwe’s annual output of the mineral to a million ounces. The deal is yet to take off the ground.
In 2004, Global Platinum and its Chinese partner Wanbao Rexco were also granted platinum claims in an investment deal worth US$1,5 billion, although the deal is yet to materialise, raising fears that the transaction was also for speculative purposes.
Karo Resources expressed interest in platinum mining in 2013. Pouroulis wrote to Mpofu seeking permission to mine platinum on land which government wanted to acquire from Zimplats.
In a letter to Mpofu, Pouroulis said: “We have noted with great interest your announcement of 12 February 2013 regarding the repossession of 27 948 hectares of land from Zimplats for allocation to new investors. Through this letter, I would like to re-affirm Karo Resources Ltd’s desire, commitment and technical and financial ability to invest in Zimbabwe’s platinum group metals (PGM) mining sector,” read part of the letter seen by the Zimbabwe Independent.
At the signing of the deal, Mnangagwa said the project should have been concluded six years ago when he took Pouroulis to former president Robert Mugabe.
He claimed that did not happen due to corruption and bureaucracy.
In January this year, Pouroulis’s son Phoevos met Mnangagwa, two months after he took over the country’s leadership from Mugabe following a military coup. Pouroulis told reporters at the time the purpose of his visit was to seek investment opportunities in the country.
In 2011, the state-controlled The Herald warned Zimbabwe had been alerted of dubious investments, including that of Pouroulis, after his company Kameni was reported to the South African Police Service’s commercial crimes unit for “false claims”.
The company had then been trying to raise seed capital for its projects in Kalkfontein and Great Dyke in Zimbabwe.