Zimbabwe Mining Development Seeks To Protect Assets From International Debt Dispute

Zimbabwe’s state-owned Zimbabwe Mining Development (ZMDC) is seeking a resolution to protect its assets, which are at risk of being seized over a debt incurred from an international arbitration case with Amaplat Mauritius, reported Bloomberg.

ZMDC chairman Paul Chimboza has confirmed the authenticity of a letter addressed to Mines Minister Winston Chitando, requesting government intervention in the dispute linked to cancelled nickel and platinum projects.

The letter, verified by Bloomberg, highlights the corporation’s repeated requests for the state to assume the $93m debt owed to Amaplat’s unit.

The arbitration case was ruled in favour of Amaplat by the International Chamber of Commerce in 2014, with Zambia’s High Court allowing the enforcement of the ruling in 2019.

A settlement proposal was accepted by Zimbabwe’s Finance Ministry in 2021, with ZMDC agreeing to make the payments, which had escalated to $65.9m.

As part of the settlement, Bravura, owned by Nigerian businessman Benedict Peters, was to pay $15m to Amaplat.

However, according to Chimboza, Bravura has only paid $3m, and the remaining terms, including the transfer of mining assets, have not been fulfilled. Bravura officials have not commented on the matter.

ZMDC’s financial woes are compounded by the fact that most of its assets have been transferred to Defold Mine, a new state company, leaving it with limited internal resources to address the debt.

The financial strain on ZMDC is exacerbated by legal costs, which have exceeded $500,000.

Amaplat insists that the responsibility for the debt lies with the Zimbabwean Government.

Amaplat in a response to queries said: “As the ICC award is against a Zimbabwe government parastatal and the commissioner of a government ministry, the ZMDC and the Chief Mining Commissioner of the Ministry Mines, the public debt remains the responsibility of the government of Zimbabwe for the full amount.”

Further legal complications loom for Zimbabwe, with Amaplat planning to register its award in Canada following a similar action in the US. A related hearing is scheduled for 30 June.

Zimbabwe is facing significant financial challenges, with state entities owing more than $21bn and being excluded from international capital markets due to defaults on loans from institutions such as the World Bank and European Investment Bank.

Last year, Zimbabwe announced plans to secure a 26% free-carry stake in all new mining projects in the country.