Mining daredevils prepare for return to Zimbabwe

London — Robert Mugabe’s fall as Zimbabwe president is setting the scene for the return of a London mining listing for Andrew Groves and his long-term business partner — and former England cricketer — Phil Edmonds.

Groves is preparing to relist the pair’s Zimbabwean coal, chrome and gold assets in London through the reverse takeover of a cash shell, or dormant company.

He sees the ascent to the presidency of Emmerson Mnangagwa, a man who served more than half a century at the side of Mugabe, as beneficial.

“I’d like to build it into a mid-tier mining company,” Groves said.

He had a lot of local contacts, he said. “I’ve known Emmerson for 15 years. He’s made a huge change already.”

Mnangagwa, Zimbabwe’s former spy chief, became president in November with military backing and has offered to hold elections by July.

His administration abolished rules that mining operations must be at least 51% owned by black Zimbabweans for all minerals other than platinum and diamonds.

Zimbabwe is geologically rich, with deposits of gold, chrome, lithium, coal, diamonds, platinum and iron ore.

Mine development stalled under Mugabe, whose policies led to a collapse in the economy and hyperinflation.

“Everything has changed in the country,” said Groves, who will not hold an executive position in the new company. “There’s a huge amount of euphoria.”

Groves and Edmonds delisted their Sable Mining venture, which was trying to build an iron-ore mine in Guinea, less than two years ago.

That followed a slump in prices of the commodity and bribery allegations that the company denied.

The company’s market value reached £300m in 2010 before collapsing to just £2.2m and being delisted.

Now renamed Consolidated Growth Holdings (CGH), the private company that holds assets in Zimbabwe and Guinea is in talks with London-listed Contango Holdings for a reverse takeover.

Past deals by Groves and Edmonds include the sale of Central African Mining & Exploration for about £584m in 2009, after securing copper and cobalt mines in the Congo with the help of Dan Gertler.

This month, CGH said that charges brought in Liberia against Sable Mining and Groves had been dropped after a review that concluded they had not had “improper or illegal” interactions with officials in the government.

Groves said CGH’s first priority would be coal and its Lubu asset could begin producing before the end of the year.

“Zimbabwe has been hugely neglected,” he said. “As a destination for mining, it’s one of the best.”

 

Bloomberg

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