There is a mining licence being contested today in Zambia with, on the one side, intimidation and defamation and on the other corporate social responsibility and the promise of jobs. This is not an unusual occurrence in the highly competitive world of Copper Mining. What is unusual is the contrast between the styles and the ethics of the two parties in these disputes. One side represents a throwback to the Zambia of the past that needs to be buried forever. The other side represents a future in which foreign investment, local ownership and community development work together in the economic interest of the country.
Xtract Executive Chairman Colin Bird is partnered with the Jerabo gang leader Shawi Fawaz. For those who may not know these names, Jerabo, the notorious gang of Copper thieves and gangsters lost their former leader, Youngson Kalobo, in 2015. Their current chief, Shawi Fawaz owns, with his wife, Hetro Mining and Lunga Minerals. They are in partnership with Colin Bird’s Xtract Resources.
Moxico Resources under their Chief Executive Alan Davies who is working closely with the Senior Chief Chizera of the Kaonde People of North Western Province and other local leaders and members of the community, including Mufumbwe acting District Commissioner, Patson Mulaisho, currently hold that licence. They have been working with local companies, employers and educators to prepare the ground for the re-opening of the mine. When Moxico began work, Patson Mulaisho, commented: “The people of Mufumbwe and Zambia as a whole cannot wait to see the commencement of operations at Kalengwa mine because the facility will bring about vast economic transformation in the district as well as the country in general.”
The Supreme Court of Zambia has turned down Fawaz’s repeated attempts to get control of the licence for the Kalengwa Mine from its rightful owners Euro Africa. Moxico invested in the mine and acquired the licence from Euro Africa in May 2018. Moxico’s plans were ambitious and based an enlightened corporate social responsibility approach to the role of the two local mines – the Kalengwa and the Mimbula – in the community. Both the Senior Chief and the District Commissioner understand the potential economic impact of the mines. The Mimbula Mine will be employing over 1500 people when operational in late 2020 through to 2021. The Kalengwa Mine will employ around 500. That is 2,000 new jobs in the mining industry. To get that number in perspective the total number employed in mining in Zambia in 2018 was 58,000. Together the mines will represent an investment of $250m in the Zambian economy. The multiplier effect of this investment through the local and national supply chain will be significant for local supplies of transport, raw materials and services. But aside from the generic impact, the approach of Moxico has already been significantly proactive in the community.
In June Cavmont Bank announced the closure of 19 branches with the loss of hundreds of jobs in predominantly industrial areas including, Mufumbwe. The mining company made significant deposits with the bank, promised that the 2,000 employees would be paid through the branch alongside all the contractors and the branch was kept open. It will also mean that local civil servants in the area will be saved from having to travel 240km to collect their wages! Moxico have also began work on rebuilding and updating the local police station.
Repairing police stations is not high on the priorities of the Jerabo gang leader Shawi Fawaz and his partners. Having lost in the Supreme Court time after time, the Jerabo gang resorted to libellous articles and the physical occupation of the Kalengwa Mine by groups of South African “investors”. It is worth considering one such article in a little detail because it gives a strong indication of the tactics being used by one side in this dispute. The article appeared in Zambia Reports on 26 July. It sensationally begins by claiming that Moxico Chief Executive Officer Alan Davies is facing jail for failing to obey an ex parte order to restrain him from interfering with the operations of the Euro Africa Kalengwa Mine Limited. The purpose of this allegation, aside from the defamation, is to draw attention away from the legal reality. The Supreme Court clearly established ownership of the Kalengwa Mine and the Ministry of Mines approved the purchase of the mine’s licence by Moxico. The real interference occurred when the Jerabo gang somehow managed to get that licence cancelled and a new one issued in the name of an entity they control called KPZ. It is this transaction, or series of transactions, which is currently under close scrutiny and investigation by the government of Zambia.
The Zambia Report article goes on to allege that “Moxico illegally bought shares in the mine while the dispute between shareholders was still in court”. But there has never been on public record any objection to the purchase of shares in Euro Africa Kalengwa Mine Limited (“Euro Africa”) in May 2018. Indeed, it was approved by the local community leaders and by the Zambian authorities including the relevant offices of the Ministry of Mines. It then broadens the attack; Mr Davis has apparently been engaged in government fraud in West Africa. In fact, Mr Davies has never been charged with fraud in any jurisdiction anywhere on earth. No doubt lawyers will be discussing the relevant merits of actions for defamation against the journalist and the paper but there is a bigger issue here for the people of Mufumbwe and the wider economic future of Zambia.
On one side we have Moxico, a company backed by globally recognised investors from the UK, USA, Australia, Hong Kong and Singapore, ready to put $250m into the economy and create 2000 mining jobs and thousands more in the supply chain. We have a company with transparent ownership and good relations with local stakeholders. They are ready and waiting to start making a difference in this community.
On the other side we have this entity KPZ which managed, no one seems to know how, to acquire the licence for one the local mines. This entity involves a partnership between Colin Bird’s Xtract and Shawi Fawaz’s Hetro Mining and Lunga Minerals. Its ownership is obscured by offshore holdings in a entity called KPZ International registered, of course, in the British Virgin Islands and owned ultimately by who knows who? In 1998 Fawaz had a warrant out for his arrest as a drug dealer and he was deported from Zambia. In 1994 he was sentenced to 20 years for murder, he was acquitted when the only eyewitness changed his testimony before the Supreme Court hearing. In 2006 he was arrested and charged with aggravated robbery and in 2007 arrested and charged with aggravated robbery and conspiracy to murder.
Proverbs 13:20: “He that walketh with wise men shall be wise: but a companion of fools shall be destroyed. … Keep company with the wise and you will become wise.” Perhaps those working with and supporting Fawaz in his obsession with owning Kalengwa mine should take note. If you walk with criminals, then, presumably…
Coulter was trained as a journalist at E.W. Scripps School of Journalism before working as a PR and content consultant for a range of Fintech start-ups in Ohio and across the US. He now combines content creation for a range of clients with investigative journalism in financial, energy and development related fields.