The Zimbabwean government has been warned against a potential mining investor, Eurasian Resource Group (ERG). The warning follows the company’s interest to invest in the Zimbabwean mining sector.
The warning also comes when the government terminated some deals after partners failed to fulfill their mandates.
Mining experts say that the Kazakhstan-based ERG which is planning to acquire ZimAlloys lacks the capacity to embark on meningful investment in Zimbabwe’s chrome sector.
ERG, formerly known as Eurasian Natural Resources Corporation was in 2013 delisted from the London Stock Exchange when its shares tumbled significantly following a series of scandals, including allegations of fraud, bribery, and corruption relating to the company’s activities in Kazakhstan and Africa. It also received criticism for its dealings in other countries including in DRC where it deprived locals of clean water.
The company, however, claims that it has reformed under the new management of chief executive Benedikt Sobotka. The CEO is believed to have been in the country for days now.
An official in the Mines ministry said:
While it is true that the new government is open for business, but that should not translate to mean that every foreign firm is an investor. The government should conduct due diligence with all investors so that it doesn’t tarnish its image.
More: Financial Gazette