Beijing Pingchang Investment, the Chinese investor that won bid to inject $100 million into the revival of Kamativi Tin Mine, risks having its agreement cancelled if it fails to prove it can raise the required capital, Parliament has said.
The company has since been directed to work with the Reserve Bank of Zimbabwe (RBZ) in proving that it has the financial resources to undertake the Kamativi Tin project.
This comes as there has been not much movement on the ground since September 2015 when Beijing Pingchang won the agreement to resuscitate the mine in a joint venture deal with the Zimbabwe Mining Development Corporation (ZMDC).
ZMDC holds 51 percent while Beijing Pingchang has 49 percent.
Chairman of the Parliamentary Portfolio Committee on Mines and Energy Temba Mliswa, said the investor should take the proof to parliament on May 21 when another hearing would be held, this time including Mines and Mining Development Minister Winston Chitando.
“ZMDC, we want a letter from you done by a reputable company indicating that the investor has capacity to raise $100 million. We are tired of working with organisations that have no money. Why not give them (tenders) to our people?
“Bring (the investor) the business plan and the proof that the money is there, and your agreement to do the project. The letter of proof that you have the money must come through the RBZ.”
If the firm fails to prove its ability to provide the proof, processes would be instituted to withdraw the agreement, as is the case with Geiger International, which failed to start meaningful progress two years after winning the tender to dualise the Harare-Beitbridge Highway.
The heavy-handed treatment of Beijing Pingchang follows an almost two year delay amid reports that the firm has no money to implement the mammoth project.
Already, there is discord over the amount of capital that has been pumped into the project so far, with Beijing Pingchang managing director Shouming Lin, saying $7 million has come through.
Shouming said the money has been used to import equipment including drilling trucks, laboratory equipment and an excavator.
However, ZMDC acting managing director Luke Akino, contradicted the figure, indicating that just under $1 million has so far been deposited into the account.
“As far as investment into the project to date, Beijing Pingchang have deposited just under $1 million. Of that amount, the balance is just under $350 000.
“We have spent roughly $650 000 towards drilling, travelling and others expenses,” said Akino.
This has raised concerns over the capital brought towards the project.
Shouming says the capital came through the RBZ.
RBZ Governor Dr John Mangudya, could not be reached for comment as he was not picking his mobile phone.
While there have been teething problems in the early stages of the agreement, which delayed the speedy take-off of the project, all appears well at the moment after a business plan was finalised.
At the same time, the project financiers are understood to have expressed willingness to fund the business after getting a resource statement.
Nonetheless, ZMDC is querying the origins of the resource statement as they claim they are not aware of it, a move which might further delay the project.
Said Akino: “According to agreement, both parties were meant to put up a technical committee which would come up with this whole (business) plan.
“Before that could be done, there was request to satisfy Beijing Pingchang’s financiers with the resource statement so (that) the financiers could accept that commitment.
“That work was done most of 2017 and they wrote to us end of December with a proposal and said they have now committed to that work and its only last Friday that they said they have the resource statement, which we are not aware of. And we still want to verify how they came about it.”
Apart from delays in crafting a business plan, some previous managers are understood to have also deliberately delayed the project, because they had not obtained kick-backs.
ZMDC board chairman David Murangari said the managers have since been fired for their “inefficiencies” and the board has insisted that there are timeliness which are followed through.
Nothing much is known about Beijing Pingchang, particularly its financial muscle, given that web searches don’t yield anything about the company.
However, Murangari — who has travelled to China with some high officials to see Beijing Pingchang’s operations — says the firm is an off-shoot of the unbundling of the cash-rich China Railway Group to make the firm efficient.
Shouming also told parliament that they have interests in gold mining in China.
Kamativi closed in 1994 due to unviable prices.