Meikles’ mining JV collapses

Meikles’ mining JV collapses

HARARE, March 22 (The Source) – Meikles Limited’s foray into mining faces uncertainty following the withdrawal of its foreign joint venture partner, Centar Limited.

Announcing Meikles’ belated 2016 financials, chairman John Moxon announced that Centar had withdrawn from Zimbabwe. He did not give reasons behind the move.

“The group’s foreign mining partner has withdrawn from Zimbabwe. The group is in a position to encourage other partners to participate in mining opportunities, but it is felt that the appropriate timing of any further involvement is not yet clear,” said Moxon, whose group operates hotels, supermarkets, department stores and tea firm Tanganda.

Meikles partnered Centar in 2012 to establish Meikles Centar Mining (MCM), saying the firm had identified opportunities in gold, chrome, tungsten, tantalite and iron ore mining. In December 2014, Moxon announced that MCM, in which Meikles held a 51 percent share with Centar holding the balance, had received approvals from the central bank and the indigenisation ministry.  

On Wednesday, Meikles concurrently released its financial results for the financial year to March 2016 as well as the half year to September 2016, following delays caused by its dispute with the Zimbabwe Stock Exchange over the quantum of the debt the group is owed by the government.

The ZSE briefly suspended Meikles in February 2015 amid allegations the company had inflated the government debt. Meikles retaliated with a $50 million lawsuit against the ZSE.

Meikles has since indicated it might delist from the ZSE and put out a March 9 cautionary statement announcing plans to restructure the group.

The government’s debt to Meikles arises from a $40 million deposit placed by the group with the central bank after its 1996 initial public offering. Resolution of the protracted debt issue has been held back by significant differences in how much the government owes Meikles now.

The financials released on Wednesday, in which Meikles reported total comprehensive losses of $8 million (from $47 million FY2015) for the full year to March 2016 and $841,000 (versus $894,000 in HY2015), did not include the $42 million (excluding interest) which Meikles says government owed it as of September 2016.

“The basis for the calculation of sums due from government have been agreed in more than one meeting that the company chairman and others, together, have attended with the Minister of Finance and Economic Development,” Moxon said.

“The calculation of sums due have been subject to assessment by expert consultants.”

Revenue increased by 9.7 percent from $413,3 million in the previous year to $453,6 million while operating profit improved to $2,05 million from a $10,4 million  operating loss recorded in the previous year.