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Nigerian billionaire Zimbabwe deals falter amid capital problems

by Staff reporter
28 May 2024 at 12:46hrs | Views
WITH the help of Zimbabwean authorities who supported him amass platinum, gold, lithium, iron ore, tin and some rare earth mineral concessions, it first appeared like he was going far.
At some point it seemed he would be the first black investor in Zimbabwe to own real assets in the mining industry on a bigger scale.

For he came with a big reputation as an oil and gas billionaire planning to inject over US$1 billionaire into Zimbabwe, with a local platinum mining project as the flagship.

However, Bennedict Peters (pictured) has run out of steam, or so it seems.

His much-sought-after Kamativi area lithium dump is now in danger of being taken away by the government, a partner in the project, if no tangible process is made.

"Authorities are looking into the status of Peters' projects; the platinum mining project in Ngezi, lithium dump in Kamativi, iron ore, tin and gold," a senior ministry of Mines official said.

"There is concern about the slow pace and stalling of some of the projects. The situation is under scrutiny.

"Although recent reports said civil works had started at the project and there was exploration, surveys and sampling to understand the lay of the land and that a consultant has to do mineralogical and metallurgical testing, which then can led to selection of mining technique to extract spodumene, it's a mineral of economic interest, progress is very slow."

Sources say the authorities are not happy and are now thinking of going it alone as Peters seems unable to provide capital.

Alternatively, they may invite other investors into the partnership, the Chinese being the preferred partner.

An official added: "Peters has run into financial challenges in Ghana where he is based and those issues are affecting his investments elsewhere."

Peters' Bravura has a 60%:40% joint venture with the government through a special purpose vehicle in Kamativi.

It was a promising project at the beginning.

Kamativi Tin Mine closed in 1994, leaving behind huge mining dumps. While tin has been exhausted, the dumps contain lithium ore, and there are plans to extract 30 000 tonnes of spodumene concentrate each year.

However, money is now the problem, sources say.

Government officials told The NewsHawks this week that they were disappointed and now anxious about Peters' investment plans which have ground to a halt due to financial and implementation problems.

"Peters promised to invest over US$1 billion into lithium, iron ore, tin, gold and rare earth minerals, as well as processing the Kamativi lithium mining dump," a government official said.

"He was supposed to process the lithium mining dump in Kamativi. Extraction of valuable metals from tailings dumps (or residues or low grade stockpiles) traditionally regarded as waste, has long been researched by metallurgists. A number of developments in mineral processing technology have combined to make the re-treatment of numerous tailings dumps a profitable proposition.

"However, Peters hasn't done much. He hasn't even developed and processed the lithium mining dump. We have visited the area and all he has done is to fence the area. Even then, it's not even complete yet."

Mining projects like these are part of President Emmerson Mnangagwa's Vision 2030 strategy, the authorities say.

Last year, Peters and his Bravura Holdings Ltd country manager Clarkson Muzorewa and Mines ministry deputy minister Polite Kambamura and permanent secretary-PFungwa Kunaka held a crisis meeting over the issue.

Mnangagwa was involved in launching Peters' US$1 billion platinum deal which is part of Mines minister Winston Chitando's strategic roadmap to achieving a US$12 billion mining industry by 2023 – the year of the past crucial general elections.

Chitando is back in the ministry after he was reshuffled out to Local Government following  last year's August general elections.

Bravura was given a 3 000-hectare (7 400-acre) concession in Selous, Mhondoro-Ngezi area in Mashonaland West province about 75 kilometres southwest of Harare, in 2019.

According to the ministry of Mines, Bravura is holding onto over 20 000 hectares of platinum, lithium, iron ore, gold and rare earth metal concessions across the country, but failing to develop them productively.

But the company is not making any meaningful progress on its projects worth over US$1 billion.

Sources said government officials expressed serious concerns over lack of progress, saying Peters and his company had spent five years now without moving forward.

In response, Peters and his team say they are making progress.

Only recently,  Bravura head of Kamativi project Tafadzva Murinzi was quoted in the media as saying after the signing of an agreement, the company had begun several processes that included exploration, surveys and sampling.

He said it had appointed a consultant to do mineralogical and metallurgical testing to determine the mining technique to extract spodumene, a mineral of economic interest which has lithium.

Peters' team has previously claimed they were not making progress on their projects because they needed more land to expand their concessions and production activities, although the government is aware of the Nigerian tycoon's financial problems threatening his Zimbabwean operations.

Peters' Aiteo Eastern E&P Company Limited, a leading indigenous oil exploration firm founded in 2013, is embroiled in a mounting debt crisis.

According to recent disclosures by the Nigerian subsidiary of British multinational oil company Shell Plc and seven local banks, Peters' energy company owes a staggering US$2.6 billion in oil-related loans.

This figure represents an increase of US$910 million compared to US$1.7 billion owed when Shell Plc initially reported the debt.

The creditors and Aiteo have been locked in a legal dispute since late 2019 when the lenders complained of the default.

The U$2.6 billion debt can be traced back to Aiteo's acquisition of a pipeline and operating interest in a highly valuable onshore oil block eight years ago.

Nigerian banks such as Zenith Bank Plc, Fidelity Bank Plc, and Guaranty Trust Bank Plc extended loans amounting to US$1.5 billion to support the acquisition, while Shell provided US$504 million in financing as the asset seller.

Since the initial loan agreement, Aiteo, Shell, and the Nigerian lenders have been embroiled in a protracted legal battle. Aiteo has claimed it has already repaid US$1.2 billion and denies defaulting.

However, creditors say its outstanding debt has reached approximately US$2.6 billion, including interest, fees, and penalties.

This led to emergency meetings between Peters and Zimbabwean officials amid fears the deals will collapse like the Russians' Great Dyke platinum investment.

After coming into Zimbabwe four years ago amid pomp and ceremony promising to invest US$1 billion into the Selous platinum project through Bravura, Peters is struggling to live up to his promises due to financial problems engulfing him back home.

As a result of the crisis, the Zimbabwean government has summoned Peters and his country representatives to explain the situation.

Government officials are comparing Peters' platinum project with Tharisa Plc's platinum investment through Karo Mining Holdings in the same Great Dyke region, which is making progress.

Karo Mining Holdings' US$4.2 billion platinum project on Zimbabwe's mineral-rich Great Dyke belt is regarded as a world-class platinum group metals asset which will have a profound impact on Mhondoro-Ngezi communities and surrounding areas, as well as the economy.

The project is located approximately 80 kilometres southwest of Harare. It covers 23 903 hectares on the Great Dyke. It is located south of the Zimplats Selous Metallurgical Plant and north of the Zimplats Ngezi operations.

Karo Mining Holdings plc, which owns the project, is owned 70% by South Africa's Tharisa plc, while 30% equity is privately held by Leto Settlement Trust.

Tharisa plc is listed on the London Stock Exchange (LSE) and on the Johannesburg Stock Exchange, the largest bourse in Africa.

The LSE is the second-largest bourse in the world after the New York Stock Exchange, the biggest globally by market capitalisation.

The Karo platinum project is run by Karo Zimbabwe Holdings, which is owned 85% by Karo Mining Holdings plc and 15% by Generation Minerals, a government special purpose vehicle.

Zimbabwe is the second-largest producer of PGMs after South Africa. Russia is third.

The project has an initial life of 17 years with less than 10% of the 23 903ha mining area having been utilised to cover this production lifespan.

Apart from platinum, Bravura also intends to explore mining lithium, gold, rare earth minerals and tin in Zimbabwe.

It is also seeking to mine cobalt in the Democratic Republic of Congo, copper in Zambia, gold in Ghana and iron ore in Guinea. Namibia and Botswana could also be options for the company.

However, Bravura seems to be now badly failing to implement its projects largely due to financial problems.

Peters' initial enthusiasm for the platinum mine development project in the Maflox Claims area of Selous is thus stalling, shortly before Mnangagwa's re-election bid.

Bravura has failed to comply with regulatory requirements and fulfill its commitments to invest, leading to a shift in focus.

Instead, the oil and gas tycoon and company have discreetly turned his attention to what he thinks is a low-hanging fruit, a lithium deposit in Kamativi, a small mining town in Matabeleland North province.

A source said: "Peters and his company were also awarded the Kamativi lithium dump in Matabeleland North province. The asset was wanted by many investors and hotly contested. It contains lithium worth billions of dollars, and Peters and his company promised government that a dump processing plant would be built in February 2023, and production would start in July this year. They have missed the target and now say they will start production in February next year. We have visited the dump and all they have done is erect some incomplete fencing around the dump. Why should government not repossess the dump and allocate it to serious investors?"

These problems and lack of progress have put Peters' Zimbabwean mining projects in serious jeopardy.

Source - newshawks