…Shareholders fight escalates
…Mine revival in limbo
Russian investor IR Trading Limited could be on its way out of coal miner Liberation Mining Company peeved by the escalating dispute with local shareholders and the gloomy prospects for the fossil fuel, Business Times has established.
The developments are threatening the revival of the mine with the Russian shareholders now pulling out of the investment.
Liberation Mining Company’s chief executive officer, Victor Tskhovrebov, told Business Times that the revival of the mine was in doubt due to the existing ownership dispute coupled by the declining demand for coal on the global market.
“The continued dispute with the local shareholders is a huge challenge to the re-opening of the mine and the other challenge is that no one wants coal on the global market anymore. First of all there is this dispute that must be fixed and there is no market for coal anymore. I once told the local shareholders this coal operation should be a short term vision,” Tskhovrebov said.
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, IR Trading in 2017.
Liberation got a special grant to mine in the coal-rich Lubimbi area of Matabeleland North, but ceased operations about three years ago due to shareholder disputes.
It is alleged that the local partners in the coal miner, wanted to hoodwink their Russian partners.
But, the planned move was exposed following a High Court application last year by the Russian investors, who demanded the handover of shares by local partners to them.
It is alleged that the local partners wanted to defraud the foreign investor, deviating from the original facets of signed shareholder agreements.
This came after local partners failed to transfer 49% shareholding to IR Trading despite the commencement of operations at the Matabeleland North based mine.
The local partners are said to have been demanding the Russians to first fork out US$39m for the stake, a position which the Russians labelled fraudulent and non-existent driven by greedy partners who are after reaping where they did not sow.
Contacted for comment, Matabeleland North traditional leader Chief Mabhikwa told Business Times that the continued squabbles around the re-opening of the mine were having a huge negative impact on the community.
“They did their first stage of exploration and eventually mining. This has had an impact on the community with regards to employment. Empowerment of the local community and the company had promised to contribute towards Lupane community share ownership trust. Seeing the birth of liberation was hope for the community. We are in constant touch with the local shareholders,” Chief Mabhikwa said.
Despite the current shareholding squabbles, Liberation had plans to inject US$100m over five years targeting a production of 15m tonnes per annum in 2022.
The company is also among the 24 companies that were granted special grants by the government to mine coal and methane gas along the rich belt in 2003 but failed to get investment for the project.
In 2018, Liberation Mining had plans to mine between 1.5m tonnes and 2m tonnes of coal. The project is worth an estimated US$500m.