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A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Zimbabwe’s mines minister has informed Todal Mining Ltd., a venture controlled by Eurasian Resources Group, that its platinum mining concessions could be seized because no progress has been made in developing them.
The Bokai and Kinonde concessions may be taken over under the “use-it/lose-it principle” which allows the state to repossess idle mining claims, Minister Winston Chitando said in a letter to Todal dated May 28 and seen by Bloomberg. The mines ministry confirmed the veracity of the document.
“I note with concern that over the last few years there have been several changes to the work program to make this project progress to production stage,” Chitando said in the letter.
Zimbabwe, which has the world’s third-biggest platinum group metal reserves, has struggled to develop its mining potential
Zimbabwe, which has the world’s third-biggest platinum group metal reserves, has struggled to develop its mining potential with investors from Russia, Cyprus, Nigeria and Kazakhstan yet to bring projects into production.
The Todal assets were taken from Anglo American Platinum Ltd., which does operate a mine in Zimbabwe, more than a decade ago and handed to Central African Mining & Exploration Co. That company was bought by Eurasian Natural Resources Co., which later became Eurasian Resources Group. Central African Mining lent the Zimbabwean government $100 million at the time.
“This is due process in the spirit of administrative justice,” Polite Kambamura, Zimbabwe’s deputy mines minister, said by phone. “We will give the asset holder a chance to respond through the mining affairs board. If there are any developments that they have made on it which we are not aware of they will make those submissions and a final decision will be made after all due process has been done.”
ERG didn’t immediately respond to questions sent by email and text message.
In 2013, the government said production on the mine was due to start that year. In 2008, Camec said a mine producing 150,000 ounces of platinum annually could be built for $200 million.
(By Ray Ndlovu and Godfrey Marawanyika)
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