17 June 2024 | 01:49 PM

Iron man in the middle

Key Takeaways

Lazarus Zim, the chair of Kumba Iron Ore, is tied to the main shareholder of the well-connected BEE company that snaffled rights worth billions from under Kumba’s nose.

Zim confirms “a potential conflict”, but says Kumba declined offers that he recuse himself from deliberations over its dispute with Imperial Crown Trading 289, the BEE company. Kumba confirms this.

The department of mineral resources’ award of part of the Sishen iron ore mine to Imperial Crown is controversial because of the questionable circumstances and impression of elite enrichment.

Imperial Crown’s shareholders include Gugu Mtshali, reportedly Deputy President Kgalema Motlanthe’s romantic partner. Fifty percent is held by Jagdish Parekh, a key executive of the group of companies controlled by the Gupta brothers, benefactors of President Jacob Zuma and his family.

The Mail & Guardian has reported allegations that Parekh holds the stake on behalf of JIC Mining Services, a Gupta-controlled company of which Parekh is chief executive and of which Zuma’s son, Duduzane, is a director and shareholder. Parekh maintains the stake is his own.

It is through Parekh and the Guptas that Zim’s “potential conflict” arises.

Zim, who confirms being “very close” to the Guptas, is tied to them and Parekh in several ways:

  • He is a director and shareholder of Sahara Computers, the Gupta flagship. Apart from JIC Mining, Parekh also manages the Guptas’ primary investment vehicle, Oakbay Investments.
  • The Guptas’ Oakbay Trust is a significant shareholder in Zim’s Afripalm Resources, which controls Mvelaphanda Resources.
  • Zim is a shareholder alongside the Guptas and Duduzane Zuma in Shiva Uranium, of which Parekh is now also chief executive.
  • Shiva is the old Uranium One Africa, which was a Gupta-led consortium bought last month.

Kumba owns 79% of the Sishen iron ore mine. The remaining 21%, the subject of the dispute, became available when its former owner, Arcelor Mittal, failed to convert its old-order mining rights in April last year.

Four days later both Kumba – chaired by Zim – and Imperial Crown, now known to be half held by Parekh, submitted applications to the department of mineral resources for the 21%.

Commentators have queried how Imperial Crown acquired the extensive data necessary for an application as quickly as Kumba, which as Sishen’s operator has direct access. The department awarded the rights to Imperial Crown on the basis that both applications arrived simultaneously, but Imperial Crown had superior BEE credentials.

Kumba has objected and the department is reviewing its decision.

Zim said he had no advance knowledge of Imperial Crown’s application in competition with Kumba – he was told this year only, by Kumba’s chief executive. He then declared his association with Parekh to Kumba and its parent, Anglo American. “Being mindful of a potential conflict, I offered to recuse myself from all board and management discussions [on the matter]. In all instances, it was felt that the interests of [Kumba] would be best served by my continued participation.”

A Kumba spokesperson confirmed Zim’s version, saying the company agreed “there is no conflict of interest” as Zim was not involved in Imperial Crown itself.

One major Kumba shareholder disagreed, saying: “How can he be so deeply involved with the people who Kumba should be suing for billions?”

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Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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