Kazakhstan investor loses platinum mining claims in Zimbabwe
CONTROVERSIAL investor Eurasian Resources Group (ERG) has lost its platinum mining claims in Zimbabwe, after failing to develop them for the past 11 years, The Financial Gazette can reveal.
Senior government officials said the Kazakhstan-based mining firm recently sent two emissaries to try and renegotiate a new deal after the government repossessed the platinum claims at Bokai under the use-it or lose-it policy.
The government recently indicated that it was in the process of repossessing at least 213 mining concessions that are lying idle. ERG bought some platinum concessions in 2009 from a United Kingdom company with links to Billy Rautenbach, CAMEC, but the project was never developed following resistance from certain quarters in government who opposed the deal.
In 2018, following the ouster of former president Robert Mugabe, the company made an offer to increase its mining portfolio by investing in chrome and ferrochrome, but the deals also fell through.
“Two ERG officials — Akramjan Marazykov and Rakhmatzhan Khamutbaev — were in Zimbabwe to discuss terms of their concession, but they were kicked out because they honestly didn’t have a case to defend their lack of development at Bokai,” said another source.
The East-European miner is not new to controversy as it was in February red flagged in the Democratic Republic of Congo (DRC) over a US$40 million mining scandal. In 2013, the company, then known as Eurasian Natural Resources Corporation, was delisted from the London Stock Exchange when its shares tumbled significantly following a series of scandals, including allegations of fraud, bribery and corruption relating to the company’s activities in Kazakhstan and Africa.
Mining industry experts said the government should be wary of bogus investors such as ERG who hold concessions for speculative purposes while depriving genuine investors. Zimbabwe has the world’s third largest platinum group metal reserves, but investment has been largely hampered by corruption, unfavourable mining laws and currency policies.
Although ERG claims to have turned the corner and cleaned its act, and recently identified Africa as key in its long-term international growth strategy, the latest scandals in DRC and Zimbabwe make it hard for stakeholders to believe that it has departed from its previous scandal-ridden status.
Reports from DRC show that ERG was involved in a transfer of lucrative cobalt and copper assets deal that enabled a little-known investor to make US$40 million within weeks.
Congo dominates global production of cobalt, a key ingredient in the rechargeable batteries that power electric vehicles. Luxembourg-registered ERG owns one of the largest copper-cobalt projects in DRC, which is at the forefront of the company’s efforts to position itself as a major player in the revolution toward more environmentally friendly transportation.
But it is the latest transaction and almost immediate resale of control of the assets to ERG that has made the company come under scrutiny from anti-graft campaigners. Alleged corruption in mining transactions in DRC has led to financial sanctions and multiple ongoing investigations by law-enforcement agencies around the world.