Govt revokes Liberation Mining’s special coal mining grant amid ownership dispute

CLOUDINE MATOLA

Government has cancelled the coal mining special grant previously awarded to Liberation Mining (Pvt) Ltd, a company once touted as a game-changer in the country’s energy sector, following a protracted ownership dispute involving local and Russian investors.

The revocation, published in a government gazette last week, was made under the provisions of the Mines and Minerals Act [Chapter 21:05]. The special grant, located in the coal-rich Matabeleland North Mining District, had been a subject of controversy as foreign and local shareholders clashed over control of the lucrative project.

Permanent Secretary in the Ministry of Mines and Mining Development, Pfungwa Kunaka, confirmed the development in the gazette, citing Section 305(1) of the Act as the legal basis for the grant’s cancellation.

“It is hereby notified in terms of Section 305(1) of the Mines and Minerals Act [Chapter 21:05], that the Coal Mining Special Grant (Part XX) issued in respect of the undermentioned special grant was cancelled on 3rd April, 2025,” Kunaka stated.

The special grant was awarded for a coal mining venture worth an estimated US$500m, with plans to extract between 1.5m and 2m tonnes of coal annually. The mine, located in the Lupane area, was seen as a strategic asset in Zimbabwe’s efforts to boost domestic coal production and reduce dependence on imports.

Liberation Mining was founded in 2006 by three Zimbabwean entrepreneurs—Peter Mutsinya, Rainor Robinson, and Gavin Von Platen. In 2017, the company entered into a joint venture with IR Trading, a Russian investment firm, in a bid to raise capital and scale up operations.

However, what began as a promising partnership soon turned sour. A series of legal battles erupted between the Zimbabwean founders and their Russian partners, with both parties accusing each other of breaching contractual obligations.

During court proceedings, IR Trading alleged that its local partners had imposed investment conditions that were not part of the original agreement. The Russian firm argued that these additional demands were “non-existent” and served only to frustrate the joint venture’s progress.

The Russians insisted they had met their investment obligations, stating that they had injected more than US$6.2 million into the coal project. “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,” the company said.

The mining site itself had shown considerable potential. It was positioned to become one of Zimbabwe’s largest coal producers, a crucial contributor in meeting the country’s growing energy demands. Liberation Mining had also planned to develop supporting infrastructure, including processing plants and rail links, to streamline operations and facilitate exports.

Sources close to the matter told Business Times that the government’s decision to cancel the grant may have been influenced by the ownership wrangle, which had stalled progress for years. “The project was effectively frozen because the two sides could not agree on who controlled what. The government had to intervene eventually, as the impasse had become untenable,” a mining sector insider said.

The cancellation of the special grant is likely to send shockwaves through the investment community, especially among foreign entities looking to invest in Zimbabwe’s extractive industries. Industry analysts say the move underscores the challenges that foreign investors face when entering joint ventures with local partners in Zimbabwe’s mining sector.

“This development raises concerns about the legal and contractual protections available to foreign investors. When disputes of this nature arise, and they result in project cancellation, it sends a negative signal to the international community,” said an analyst who asked not to be named.

The cancellation also comes at a time when Zimbabwe is actively courting foreign direct investment to rejuvenate its mining sector, which remains a critical pillar of the country’s economy. Coal, in particular, is central to Zimbabwe’s energy strategy, given the ongoing development of thermal power stations and the need for consistent power supply to industrial users.

Liberation Mining’s exit from the scene opens a new chapter in the saga, with speculation mounting over who will now take over the coal-rich concession. Some sources suggest that new investors—possibly with government backing—are already being lined up to assume control of the mining rights.

“The resource is still there, and it remains highly attractive. The government is likely to reallocate the concession to new players who can deliver without the drama,” said another source familiar with developments in the mining ministry.

For the founders of Liberation Mining, the cancellation marks a bitter end to nearly two decades of effort to bring the project to fruition. The company had initially positioned itself as a homegrown success story in a sector often dominated by international conglomerates.

Efforts to get an official comment from the Zimbabwean partners were unsuccessful at the time of publication. However, sources close to the founders said they were “deeply disappointed” by the government’s decision and may consider legal action or appeals to recover some of their investment.