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‘Mwana Africa misled shareholders’

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AIM-listed Mwana Africa plc has been accused of “misleading” shareholders with claims that Bindura Nickel Corporation (BNC), its closed nickel extractor, had retained the critical mass of skills required to restart its nickel operations closed in 2008.

Mwana Africa owns 52,9% of Zimbabwe Stock Exchange-listed BNC, the country’s sole primary nickel extractor, currently sweating to reopen its three nickel operations, Trojan Mine, Shangani Mine and Bindura Smelter and Refinery.

The minority interest is held by government institutions and institutional investors.

In an operations and exploration update to shareholders on October 20, Mwana Africa said BNC had survived the skills flight that hit local mining operations following a wave of shutdowns that swept across the industry two years ago.

“The management team at BNC has been retained during care and maintenance and have been re-mobilised and actively engaged in the pre-start programme,” Mwana Africa said in the statement in which it also said BNC was in talks with off-takers and potential debt financiers to commence its phased restart programme, starting with Trojan Mine.

But NewsDay, which has been keenly following the issue, has since learnt from aggrieved ex-BNC senior managers that Mwana Africa misled shareholders with “unfounded” claims that its local nickel subsidiary had no qualms over skills, a cancer gnawing nearly every mining operation in the country.

“That is absolutely untrue,” a senior BNC manager who has left the company said, illustrating his point pictorially.

“Mwana Africa misled shareholders. This is the BNC management team that Mwana was talking about. Except two, the rest have left the company. This was the core management team of BNC. Now, tell me, which management team did they retain?”

The ex-employee said BNC lost the bulk of its senior employees to Zimplats, the country’s largest extractor of platinum group metals (PGM) which include nickel.

Zimplats is currently bustling about to set up a refinery, which will see it processing all PGMs, a project that has stoked demand for scarce human resources.

Zimasco has also absorbed four former BNC senior managers, while two others have secured offshore engagements in Australia and the United Kingdom, said the source, adding the staff exodus had left the miner without a senior mining engineer.

BNC chief operating officer Batisai Manhando (circled in red) was not prepared to comment on the issue; neither would he state whether Trojan Mine would re-open this month as previously announced by managing director David Murangari.

BNC in August obtained a Competent Persons Report (CPR) for Trojan mine, the most critical instrument in the mine’s restart programme, which Mwana Africa sees as a major boost for the nickel producer in terms of securing funding, estimated at around $65 million.

The resources company has put its total recapitalisation bill at $100 million.

The CPR, compiled by SRK Consulting (UK) Ltd, confirmed that Trojan’s mineral resource runs at 3,5 million tonnes of ore with a mean grade of 1,29% Ni, with potential to increase at depth.

The report has, however, been criticised for glossing over BNC’s outstanding financial liabilities to creditors and employees, both of which require huge funding commitments, which may weigh on and probably hold up the restart programme.

The company is currently embroiled in a growing trail of long-drawn-out labour disputes triggered by its decision to shut down in December 2008 and from a failed retrenchment bid and unilateral suspension of employee benefits the following year.

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