The Sunday Mail
CHINESE investors in Africa-focused mining group Mwana Africa — China International Mining Group Corporation (CIMGC) and Mr Yat Hoi Ning — are allegedly angling to replace the current interim chairman with their proxy in order to influence the direction of the company.
There are also simmering disputes over the board structure.
However, it is believed that the move is being stubbornly resisted by the chief executive officer, Mr Kalaa Mpinga.
CIMGC controls 21,4 percent of Mwana Africa, while Mr Yat has 7,6 percent shareholding.
People familiar with the goings-on at the company say the Chinese investors want to hold the board chair post to give them “some clout”.
CIMGC gained a foothold in Mwana Africa, which is the holding company of Bindura Nickel Corporation and gold miner Freda Rebecca Mine, after injecting US$21 million in 2012.
At the time, the miner badly needed cash to restart Trojan Mine whose operations had been mothballed in 2008.
Since last year’s appointment of non-executive directors Mr Herbert Mashanyare, Mr Ngoni Kudenga, Mr Stuart Morris (interim chair) and Johan Botha, relations between Mr Mpinga and the Chinese investors have been rocky.
CIMGC and Mr Yat are reportedly vehemently against appointment of non-executive directors.
Mwana Africa sacked non-executive board chair Mr Mark Wellesley-Wood in February 2014 amid suspicion he was an agent for a hostile takeover by Centar Mining.
Mr Wellesley-Wood had been appointed in 2013.
“The issue at stake is that the Chinese investors in Mwana Africa are objecting to the appointment of the non-executive directors. The other issue is that they want one of them to become chairman of Mwana Africa but Mr Mpinga is opposed to that,” said a source privy to the developments.
Mr Mpinga was not available for comment last week.
Mwana Africa investor relations official Ms Caroline Mathonsi said: “As you can see we have been transparent in updating the market on this (matter) accordingly. The petition (by CIMGC) refers to the recent passing of Resolution 3 at the company’s annual general meeting held on 10 September 2014, which related to the re-appointment of Mr Stuart Morris as a director of the company, and alleges that the resolution was not validly passed.
“As previously announced on 10 September (2014), the votes of CIMGC and associates were not counted in the poll in respect of Resolution 3 and were deemed inadmissible because the votes, as cast, infringed the Relationship Agreement entered into by CIMCG with Mwana on 2 April 2012.
“Mwana remains firmly of the view that Resolution 3 was validly passed, and had taken legal advice which supports this position.”
She added that leave was granted to the petitioners to file an amended petition which also seeks to challenge the appointments of Mr Kudenga and Mr Mashanyare as non-executive directors.
“Mwana Africa’s position remains unchanged in respect of these court proceedings. Whilst it will continue to attempt to work with the petitioners to achieve a mutually acceptable resolution to their complaints, the company will defend its position vigorously in court if required,” said Ms Mathonsi.
CIMGC and Mr Yat filed a High Court petition on December 8, 2014 challenging the validity of the said Resolution 3, which relates to appointment of directors.
The fallout comes ahead of a bid to raise US$26,5 million for the restart of Bindura Nickel Corporation’s smelter mid-this year.
Approximately half of the capital cost will be funded through debt financing, with the remainder from existing BNC cash flow and
cash balances.
The estimated operating cost for the smelter is US$251 per tonne of concentrate.
Last November, Mr Mpinga announced completion of an independent study of the accelerated smelter restart plan. The study by Hatch Goba outlines the costs and key milestones required to restart the smelter.
Based on this, the company plans to bring the smelter on-stream to capitalise on favourable nickel prices and start contributing to cash flows during calendar year 2016.
Mr Mpinga believes the smelter can help the company grow its revenue stream “by moving rapidly up the value chain from current production and sale of concentrate, with the associated transportation saving cost of this, to production and sale of higher value nickel leach alloy”.
Close sources say it is “highly unlikely” that boardroom fights will scuttle the plan to fire up the smelter. “The operations are a different thing; this is an internal problem and it is not going to have an impact on the operations of the company. Remember, the management of the mine and the smelter is in the hands of technical consultants who have nothing to do with the haggling,” said a source.
On this matter, Ms Mathonsi said: “The questions you raise are price sensitive and as a listed entity, BNC can only disclose this through the regulatory process, i.e Zimbabwe Stock Exchange and London Stock Exchange, AIM (the Alternative Investments Market) at the Mwana level.
“However, we do regular operations and trade updates and we recently issued a cautionary whereby the directors of Bindura Nickel Corporation Limited wish(ed) to advise shareholders that the capital raising is still in progress.”
