‘I was robbed,’ Zimbabwe’s US$378m
AZIMBABWEAN small scale gold miner has filed multiple international legal actions to reclaim swathes of Mashonaland East based lithium claims taken over by Chinese tycoons in December last year.
Fredrick Mubaira’s High Court battle to repossess gold and lithium fields at Goromonzi-based Arcadia Mine further exposes shocking laxity in mineral claims administration in Zimbabwe, where wrangles have swamped the legal system.
He is also suing the Ministry of Mines and Mining Development, the custodian of the country’s mineral resources.
Arcadia was taken over by Shanghai Stock Exchange listed Zhejiang Huayou in a surprise deal last December, which paid US$378 million to Prospect Lithium Zimbabwe (PLZ) to assume 87% shareholding.
The assets hold sway on the global lithium industry due to high grade ore, whose first samples have attracted international attention.
Lithium is a key raw material in the production of electric vehicle batteries.
Investment analysts said ultimately, Zhejiang Huayou, could pay up to US$420 million to assume full control should Zimbabweans in the project agree to relinquish their 13% shareholding in the business.
It had looked calm ever since Australia quoted PLZ hived out its substantial stake to the powerful Chinese firm.
But a string of court applications filed in Harare and submitted to defendants in Zimbabwe, China and Australia in the past week have exposed fault lines in the transaction, which sent tongues wagging once it emerged foreign investors were parceling out Zimbabwean resources and earning fortunes.
Mubaira, a product of the national youth service who says he does not want to be seen “scuppering” President Mnangagwa’s “placement of mining at the centre of attaining Zimbabwe’s Vision 2030”, claimed in High Court papers filed last week that PLZ handed over the asset before concluding crucial negotiations that were taking place with him over the land.
As PLZ moved to lay out foundations for exploiting the resource in 2018, its representative in Zimbabwe, McCloud Nyasowa talked Mubaira into abandoning gold mining on the claims, the court papers said.
The agreement ended with Nyasowa paying a US$5 000 deposit to Mubaira after persuading him to move out.
PLZ was desperate to avoid controversy at the time, as it was scouting for investors.
High court papers said the parties later agreed on a US$55 000 settlement, which would see Mubaira transferring his land to PLZ.
PLZ also undertook to buy a house and a car for Mubaira, while paying school fees for his children.
The deal also involved PLZ allocating shares to Mubaira.
However, the parties agreed that Mubaira would be bought out once an investor was secured.
But at some point, disagreements emerged, which lawyers now say were motivated by the desire to take advantage of Mubaira’s financial situation and exploit him.
“Using a combination of economic duress, undue influence, cajoling and force, Mr Nyasowa drew up an agreement purporting that the purchase price was US$5 000 and that it had been paid,” Mubaira’s legal representatives, Mandizha & Company, said in letters sent to PLZ’s lawyers.
“He refused to give (our) client a copy assuring him that he would get one once all directors had signed.
“Using fraud, misrepresentation and the same tactics…all of which are reminiscent of the infamous Rudd Concession of 1888, Mr Nyasowa directed our client to lie on the transfer forms that the purchase price was US$5 000.”
Under pressure, PLZ later paid Mubaira US$8 415, instead of the