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Zimbabwe, Zambia struggle to reclaim assets in South Africa

by Staff reporter
10 May 2021 at 05:25hrs | Views
ZIMBABWE and Zambia are struggling to reclaim legacy indivisible assets including vast mineral rights covering close to two million hectares of land in South Africa left to them by the former coloniser, Cecil John Rhodes.

Rhodes, using the British South Africa Company, (BSAC) colonised Zambia and Zimbabwe in 1888 and 1890 respectively before the two neighbours became known as Northern and Southern Rhodesia as they formed a Federation.

The Cape government awarded Rhodes' company Bechuanaland Railway Company Limited, vast stretches of land to facilitate the construction of the railwayline in present day South Africa, Botswana, Zambia and Zimbabwe.

On June 1, 1899 Bechuanaland Railway Company changed name to Rhodesia Railways Limited which managed to retain ownership of mineral rights in South Africa excluding land rights.

The mineral rights covered an area in excess of 1,7 million hectares over 523 farms and in the 1930s Rhodes sold some of his land and retained mineral rights in South Africa. Rhodesia Railways became Zimbabwe-Zambia Pvt Ltd (Ziza) in 1990.

The Rhodes Trust left the mineral rights in equal shares to modern Zimbabwe and Zambia but the process of transferring mineral rights is not yet complete. There are 1 660 000ha of mineral rights in North West and Northern Cape provinces in South Africa following the recent loss of 40 000ha to Aquila through a Constitutional Court judgment (CCT08/18) in South Africa.

The other indivisible assets left by the Trust include the Victoria Falls Hotel and the Victoria Falls Bridge. There are also funds locked in the defunct Bank of Credit and Commerce International (BCCI) while Bon Accord Hotel was sold to Zambia Government and Wankie Hotel to a private investor.

Zimbabwe and Zambia jointly incorporated the Emerged Railways Properties (ERP) (PVT) LTD in 1997 to manage the indivisible assets through the Zambia Railways Limited (ZRL) and National Railways of Zimbabwe (NRZ).

Ziza is a subsidiary of ERP, whose investment and property manager's main offices are in Victoria Falls and another in Livingstone, Zambia.

The South African Government in 2005 enacted the Minerals and Petroleum Resources Development Act which sought to recognise that mineral resources are common heritage of all South Africans and collectively belong to all the people of South Africa under the framework of the use-it-or-lose-it/use-it-and-keep-it principle hence the ERP became incapacitated to exploit its mineral interests in the neighbouring country.

Through a Memorandum of Understanding based on this background, Zimbabwe, Zambia and South Africa formed a company called Pan African Minerals Development Company (PMDC) to hold and exploit the mineral rights. Each government signed a shareholder's agreement with each holding 33,3 percent and the Zimbabwe and Zambia shares are held through ERP while those for South Africa are held by Africa Exploration Mining and Finance Corporation (AEMFC).

South Africa was mandated to provide PAMDC board chair while Zimbabwe and Zambia rotate the chief executive position. There have been numerous problems in the operations of PAMDC which last held a Council of Ministers meeting in 2014 while South Africa resigned as board chair in 2017 creating governance challenges as no decisions can be validated without a board chair.

PAMDC faces dire financial constraints due to non-contributions by shareholders and governments while there is risk of losing more land due to legal suits, illegal exploration and mining that could lead to further losses.

The Council of Ministers held a meeting in Livingstone, Zambia on Saturday chaired by Zimbabwe's Transport and Infrastructure Development Minister Felix Mhona and his counterpart Mutotwe Kafwaya who is Zambia's Transport and Communication Minister and are both co-chairs.

The meeting was also attended by National Railways of Zimbabwe Board chair Advocate Martin Dinha and his ZRL counterpart Dr Wala Chabula and NRZ acting general manager Mrs Restina Zinyanduko, who together with ZRL managing director Mr Christopher Musonda are ERP co-board chairpersons. It was meant to discuss operations of ERP and status of Pan African Minerals Development Company (PMDC) so that the Ministers receive and consider reports, with a communique to be submitted to both countries' principals.

Speaking at the meeting, Minister Mhona who is a co-chair said there is a need to find a lasting solution to governance, cooperation and viability challenges which have confronted PMDC. He pledged Government's commitment to operations of ERP, adding that he had already engaged President Mnangagwa on the issue.

"This convocation is an eloquent testament that our two sister countries are totally dedicated to the cause of infrastructure development. We have moved together on a number of projects anchored on our shared vision of transforming our economies to upper middle-income status by 2030 and the opportunity offered by the ERP creates room for scaling up our further cooperation in areas of infrastructure.

"Through this participation let us scale up our government-to-government cooperation in infrastructure development and deepen people to people relations as these are catalysts for stronger relations between the two countries," he said.

While the PAMDC challenges are historic, Minister Mhona said the current governments could be the generation to unlock business opportunities that lie hidden in the mineral claims

"While the complexities of unlocking value from the vast mineral resources and interest in PAMDC are apparent, we should not lose sight of the cardinal work ethic which should be invested towards finding a lasting solution to the challenges.

"The four-tier approach which is leveraged on engagement of our South African counterparts and the need to curve out a brilliant investment plan for the PAMDC should be supported by a time bound implementation matrix. Now that we have engaged as Zambia and Zimbabwe, we will use that as a springboard of our immediate future actions to unlock the value that resides in PAMDC," added Minister Mhona. His Zambian counterpart said there was need to move with speed.

The success of PAMDC is based on mutual and beneficial cooperation of the three countries.

The meeting resolved that a viable investment framework should immediately be adopted and implemented as a strategic turnaround strategy of PAMDC and that financial constraints emanating from non-contributions by shareholders and governments should be addressed. It was also resolved that South Africa should appoint a chair to the PAMDC board and director to fill positions which have been vacant for a long time making it difficult to hold meetings and the board should meet quarterly while the Council of Ministers should immediately resume on an annual basis.

The two co-chair ministers should engage their South African counterparts through diplomatic protocol before June 15 and if the engagement does not yield desired results by the given timelines, the two ministers shall then seek the intervention of the two respective Presidents to engage their South African counterpart on the

Source - the herald

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