Tinashe Makichi
Russian firm, IR Trading, has made an application at the High Court to force its local partners to release 49 percent shareholding in Liberation Coal Mining as the battle to control the firm escalates.
Liberation Mining was founded in 2006 by three Zimbabweans, Peter Mutsinya, Rainor Robinson and Gavin von Platen who entered into a joint venture agreement with Russian investor, Vostok Coal Limited through its investment vehicle IR Trading in 2017.
A wrangle erupted between the Russians and the locals after the latter failed to transfer 49 percent shareholding to IR Trading despite the commencement of operations at the Matabeleland North mine. The local partners want the Russians to first cough up $39 million for the stake.
However, the IR Trading argues the investment obligation being raised by local partners is fraudulent because the amount to be invested into the company was agreed between the Russians and the Zimbabwe Investment Authority (ZIA), and this resulted in the foreigners securing an investment licence and exchange control approvals.
According to the application filed under HC7042/18, IR Trading cite Liberation local directors Peter Mutsinya, von Platen and Rainor Robinson, Liberation Mining Limited and Consolidated Growth Holdings as respondents.
The share transfer dispute has also been reported to the Reserve Bank of Zimbabwe (Exchange Control) in an attempt to find the correct remedy to neutralise the deadly fight.
“The application is a sad event. It has been brought about by the continued repetition and occurrence of a number of events threatening the promising marriage of the parties. Respondents have already changed goal posts on a number of occasions despite the level of commitment shown by the applicant and in fact eroding the confidence of the applicant as an investor,” said IR Trading in its High Court application.
The application also noted that the respondents had shown untold bad faith in the transaction, and in the first instance disregarded the signed agreements.
IR Trading has to date invested either directly or indirectly into the coal miner in excess of $6,2 million covering capital requirements, expenditure, incidentals and other requirements for the running of the mining operations that have been underway in Lupane.
However, without delving too much into the wrangle as the case is now before the courts, Mutsinya maintained that the Russians have to pay for the shareholding or no shareholding will be transferred to them.
“The agreement is clear; the Russians have to meet part of their obligations or nothing will be given to them. They have to meet part of the bargain before they can even claim the shares,” said Mutsinya.
Well-placed sources told Business Times that the Russians made a commitment to invest $34 million and are still on schedule in terms of ZIA authorisation.
Despite the current control issues at Liberation, the new coal mining concern has plans to inject $100 million over the next five years targeting a production of 15 million tonnes per annum in 2022.
This year, Liberation Mining plans to mine between 1,5 million tonnes and 2 million tonnes of coal. The project is worth an estimated $500 million.
