BY OUR STAFF
A mining firm has approached the High Court to stop mining activities in an area in Masvingo pending the finalisation of its dispute with an arm of the Reserve Bank of Zimbabwe (RBZ). In an urgent application filed two weeks ago, Firmo Private Limited, wants the court to order the removal of OX Mining, a company that is currently mining on its Special Grant 4541 pending the resolution of its dispute with RBZ and its arm, Finance Trust of Zimbabwe (Fintrust).
OX mining is working on the site on behalf of Elkhart Mining.
Firmo wants RBZ and Elkhart (2nd respondent) to pay the costs of the application.
The final order sought is that Firmo, within seven days of the granting of the interim order, initiate dispute resolution procedures against Fintrust as provided in the 2006 shareholders’ agreement regulation shareholding in Tuli Coal.
The urgent chamber application comes after an instruction by Firmo’s lawyers for Elkhart personnel to withdraw from the Special Grant was not adhered to.
In his founding affidavit, Firmo chairman Brilliant Mkwananzi, deposed that his company is a holder of the Special Grant to prospect for coal and coal bed methane gas excluding oil which it got in 2006.
He said the Special Grant was extended by a period of three years last year.
He said Firmo had formed a company, Tuli Coal to exploit, access, mine, process and sell coal under the Special Grant.
Tuli Coal approached ReNaissance Merchant Bank in 2006 for funding under an RBZ facility which was being accessed through various banks.
RBZ came into the picture after the bank wanted equity in the exploration venture as security for the loan.
A deal was reached in which Fintrust got 70% in Tuli while Firmo and the Katamba Family Trust had 15% each.
Following the soured relationship, after RBZ failed to provide capital injection in the project, the bank attempted to have Firmo’s right to the Special Grant ceded to it by misrepresenting facts to the Ministry of Mines and Mining Development, Firmo alleges.
RBZ applied to the Mining Affairs board in a July 14, 2008 letter for the registration of a cession of rights under SG4541 in favour of Fintrust. RBZ said it had invested over Z$2 billion into the project with the majority in the form of equity finance.
The board replied two weeks later saying at its 538th meeting had rejected the application as it did not come from the holder of the grant in question, Firmo.
Mkwananzi further alleges that RBZ had paid for the licence after the grant was extended but without the knowledge of the rightful holder and attempts to refund the bank have been spurned.
Firmo alleges that upon the extension of the grant, it wanted to pay the fees which were then pegged at US$20 000 only to discover that the fees had gone up to US$105 000.
Having raised the required amount and sought to pay, Firmo discovered that the fees had shot up to US$600 000. It sought an extension with the Ministry of Mines that was granted.
Mkwananzi said on July 9, Firmo received a report that a party unknown to it had commenced mining at its Special Grant.
On inquiry, Firmo was told that Ox Mining was on the site and working on behalf of Elkhart Mining.
RBZ subsidiary, Fintrust in mining wrangle
BY OUR STAFF