Zimpapers Logo

Oliver Kazunga, Senior Business Reporter
FORMERLY Mwana Africa, Asa Resources is seeking legal advice in a matter involving the implementation of the Indigenisation and Economic Empowerment Act following a dispute with a consortium of local mining investors.

Recently, Asa was slapped with a $20 million lawsuit by the mining investors, Zindico Consortium, for refusing to acknowledge a share purchase agreement signed in 2013 with Mwana Africa Plc.

Our Harare Bureau reported that the signed agreement gave Zindico Consortium the right to acquire 26 percent of Freda Rebecca, the local gold mining unit of the Alternative Investment Market-listed mining group.

Asa Resources has assets in Zimbabwe, South Africa and the Democratic Republic of Congo.

The giant firm is also the parent company of Zimbabwe Stock Exchange-listed nickel producer, Bindura Nickel Corporation. The bulk of Asa’s revenue comes from its producing assets in Zimbabwe.

In a statement, Asa Resources said it has been issued with a claim in the High Court where Zindico was basing on a two-year draft “unsigned agreement”, which would have been conditional upon approval by Mwana Africa’s board.

“Asa Resource announces that, further to its announcement on 5 January 2017, Freda Rebecca Gold Mine, in which the company has an 85 percent interest, has been served with a claim in the High Court of Zimbabwe. The claim has been issued by Zindico Consortium.

“Zindico’s claim appears to be based on a two-year-old draft, unsigned agreement, which, if signed, would have been conditional upon the approval of the directors of Mwana Africa plc,” said the firm.

It added: “The draft agreement was apparently negotiated by Mr Kalaa Mpinga, the then chief executive of Mwana Africa plc, who appears never to have submitted it for approval to the board of directors of Mwana Africa plc, and it has not been approved by the board of directors.

“The alleged claim seeks implementation of the draft, unsigned agreement, in relation to implementation of Zimbabwean indigenisation laws.

“Asa Resources is seeking legal advice on this matter in Zimbabwe and will update the market further in due course.”

Last year, the Chinese shareholders approved a change of name of the mining group to Asa Resources before pushing out the founding chief executive, Mr Mpinga.

The former CEO was forced out of Mwana in June 2015, following a series of clashes with the Chinese majority shareholders and some minorities, a day after an extraordinary general meeting in London had also ousted his allies from the board.

Upon taking over Asa executive chairman, Mr Yat Hoi Ning, however, professed ignorance of the agreement, saying he had never heard of Zindico Consortium.

As a result, the shifting of goal posts has riled Zindico prompting them to sue the Chinese shareholders.

According to the documents seen by our Harare Bureau with details of the deal, in February 2012, Mr Mpinga formally introduced Dr Chikanza, representing Zindico, as the official indigenous partner to the Ministry of Youth, Indigenisation and Economic Empowerment.

It is said negotiations on the commercial terms, review of the various documents and the agreement that Zindico would purchase an effective 26 percent equity in Freda Rebecca, were concluded and presented to authorities.

The amount to be paid by Zindico was agreed on in December 2013 and copies of the agreement were submitted to Government with the responsible ministry being notified of the position.

Media reports say Asa shareholders have refused to meet or engage with Zindico to discuss the issue despite numerous attempts in this regard.

China International Mining Group Corporation came on board in 2012 after injecting $21 million in the group meant to recapitalise Mwana Africa’s Bindura Nickel Corporation.

Asa Resources remains un-indigenised and continues to hold controlling interests of 76 percent in BNC and 85 percent in Freda Rebecca Gold Mine.

The Bindura Community Share Ownership Scheme share transfer allegedly remains uncompleted.

@okazunga