By Amb. Emmanuel Mwamba
LOOTING OF NATIONAL RESOURCES USING THE LAW
We urge ZCCM-IH to immediately contest this Order and expunge it.
ZCCM-IH (Kansenseli Gold Mine) in Mwinilunga ordered to cease operations and handover licence.
The Lusaka High Court has with immediate effect ordered ZCCM-IH and its subsidiary Zambia Gold Company Limited to transfer license No. 24988-HQ-SEL which forms 90% of the Kasenseli Gold Mine licence No. 26457-HQ-SML to PCB Mining Limited who are the alleged rightful owners.
Delivering judgment on 11th September, 2023, Judge Edward Musona also ordered ZCCM-IH and its subsidiary, servants or agents to cease mining operations and vacate the licence area in the Mwinilunga district and refrain from interfering with License No.24988-HQ-SEL whatsoever.
Zambia Gold Company has also been directed to account for all the mined resource being all the Gold mined on the area covered by the licence No. 24988-HQ-SEL owned by PCB Mining Limited from the date of the binding Memorandum of Agreement (MOA) being June 18, 2020 to the present date.
The Court further ordered costs in favor of PCB Mining Limited to be taxed in default of the agreement and interest paid on the successful claims at the current Bank of Zambia lending rate.
On June 18, 2020, PCB Mining Limited and ZCCM-IH signed a MOA for the exploration and mining of gold in the licensed area.
It was argued that, without following due process, the licence No. 24988-HQ-LEL was erroneously transferred to Zambia Gold Company Limited instead of to Kasenseli Gold Mine contrary to what was agreed in the MOA.
Further, the parties agreed to incorporate a special purpose vehicle (SPV) which in this case is the Kasenseli Gold Mine Limited within 30 days from date of the agreement with shareholding split as follows Zambia Gold Company with 51 percent, Infracore Limited 19percent, Kampoko Resources 12.5percent, PCB Mining 12.5 percent and Chief Chibwika Development Trust with five percent.
Kasenseli Gold Limited was to conduct the exploration works and determine whether the area contained commercial deposit before the commencement of mining in the area.
The MOA also provided that the licence No. 24988-HQ-SEL would be transferred back to PCB Mining Limited in the event that Kasenseli Gold Mine Limited failed to provide a Joint Ore Reserves Committee (JORC) compliant resource within the specified time.
It was agreed that ZCCM-IH would partner PCB Mining and other parties to develop gold mining operations in the licenced area.
“The parties also agreed to enter into a shareholders’ agreement in relation to the SPV that was supposed to start mining operations within 30 days after signing the MOA.
Nonetheless, Zambia Gold Company, which was not a party to the agreement, commenced mining operations on June 24,2020 and the Kasenseli Gold Mine Limited (SPV) was only incorporated on December 9th ,2020, more than 30 days after signing the MOA,” it read in part.
It stated that ZCCM-IH was to reimburse PCB Mining Limited with 75 percent of the verified total Capital expenditure incurred in development of the licence No. 24988-HQ-SEL on receipt of a verified audited expenditure report.
Further, ZCCM-IH was to assign 10 percent of the entire resource on the licence to PCB Mining, as established by joint ore reserves committee (JORC) standards.
“This 10 percent was subject to costs, taxes and fees to the partnership for production. PCB Mining had discretion to sell the mined resource to Zambia Gold Company and the SPV or a third party,” it stated.
PCB Mining claimed that it wrote to Zambia Gold Company on December 15th,2020 requesting the sums of money due to it under the MOA.
“PCB Mining Limited wrote another letter to Zambia Gold Company stating that Wesley Mtchotsa was its representative regarding its interest at the Kasenseli Gold Mine site, thereby needing a gate pass to grant him access to the gold mine site.
In his judgment dated September 11th, 2023, Judge Musona stated that Zambia Gold Company breached the MOA as it failed to perform exactly that which it undertook to perform, especially that it commenced exploration works shortly after signing the MOA.
“From the facts of this case, it is clear that Zambia Gold Company didn’t honor the MOA as regards its promises to PCB Mining. I therefore find that the plaintiff has a valid claim to damages.
“I accordingly award damages to PCB Mining for inconvenience suffered as a result of the breach. Since the claim for damages is not quantified, I order that the learned Deputy Registrar should assess the claim.
“Seeing that the MOA was terminated, I order the immediate transfer of the Kasenseli Gold Mine licence to PCB Mining. I also order that the defendants by themselves, servants or agents or otherwise, cease mining operations and vacate the licence area,”
“ I have gone through the evidence. The correspondence on record do reveal that the Defendants prima facie and in fact operated as a single economic unit.
This could be the reason why a management team was not appointed to act for the 3rd Defendant (Kasenseli Gold Mine Limited). The net result is that the Plaintiff has proved its case and I order interest on the successful claims at the short-term bank deposit rate from the date when the matter was commenced in Court to Judgment and, thereafter, at the current Bank of Zambia lending rate.