Dubai-based Rani Investment intends to sell its shareholding in the River Ranch Diamond Mine near Beitbridge to the government. It appears that this has nothing to do with indigenisation. The company has just failed to recapitalise its operations.
“The decision to sell its stake to the appropriate government entities came about as efforts to recapitalise the mine, including from the minority shareholders, have failed in the past few months,” the company is reported to have said.
River Ranch is owned by Rani through Limpopo Mining Resources which holds 80 percent and Khupukile Resources whose principals were Solomon Mujuru and Tirivanhu Mudariki with 20 percent. Mujuru is reported to have sold his stake to lawyer Addington Chinake.
For someone who has been following the mine’s operations over the past five years, two questions quickly come to mind.
The first is, why does the majority shareholder Adel Aujan of Rani now want to sell to the government only months after the death of his key partner Solomon Mujuru?
The second is, why is Rani going to the government when Michael and Adele Farquhar have been fighting to have the mine back since it was forcibly taken from them in 2004? Are they no longer interested?
My gut feeling is that River Ranch may now be an empty shell because while the world was focussed on Marange, no one was paying attention to what was happening at River Ranch and Rio Tinto owned Murowa.
When it was opened in the 1990s, River Ranch had the capacity to produce up to 500 000 carats a year but Auridium quit in 1998 saying its operations were not viable.
Auridium produced 474 134 carats in its first full year of production in 1996. It produced 39 000 carats in January 1998 alone, a month before it closed.
The Farquhar’s took over the mine after Auridium left but were kicked out by Aujan in April 2004.
Aujan brought in the United Nations Development Programme and World Bank –owned African Management Services Company (AMSCO) in November 2004 to help resuscitate the mine but its operations are very opaque in the three years to the end of 2007.
The company was mining but was supposedly not selling its diamonds because of the ownership dispute with the Farquhars.
Reports said UNDP vehicles were used to smuggle diamonds through South Africa. The company said it was stockpiling its production but no one ever announced the sale of its massive stockpile after the Kimberley Process team visited the country and gave the mine clearance to sell its diamonds in 2007.
The mine was reported to have produced a paltry 75 000 carats in 2008 according to Finance Minister Tendai Biti.
Ironically, the company was able to pay five expatriate managers and management services to AMSCO though it was not selling any diamonds. It was also able to carry out some development projects for the local community in Beitbridge, though it was not selling its diamonds. It employed 300 workers, though it was not selling its diamonds.
The expatriates were paid in foreign currency through ABN-Amro, a Dutch bank. How was this done in view of the tight foreign currency problems in the country at the time?
These are the questions that The Insider has failed to get answers for over the past five years.
The answers are of course with the Reserve Bank of Zimbabwe, but it won’t say anything.
Perhaps it is time the government looked at these questions before it buys an empty shell.
Here are the stories that The Insider has published about River ranch so far: