UK-BASED mining company, Arc Minerals Limited, has announced businessman and mining expert Valentine Chitalu as its non-executive director.
But Chitalu’s appointment has been criticised as part of the Arc Minerals Limited’s unyielding desperation to use political connections in its long-standing battle for Kalaba Mine owned by ZAMSORT, a local mining company in which it has shares, as shareholders boast of him being the “President’s man”.
Chitalu, former chief executive officer of the Zambia Privatisation Agency, is a long-standing ally and business partner of President Hakainde Hichilema and is seen as one of the “de-facto” advisors and think tanks on key economic policies.
Arc Minerals Limited’s Nick von Schirnding announced that the Zambian businessman would now be ‘promoted’ to be an actual director on the Arc Minerals’ board.
“I am delighted that Valentine has agreed to join our board which further strengthens our Zambian presence. Valentine brings a wealth of experience as a successful entrepreneur with an extensive international and Zambian network both within the mining sector and beyond. I look forward to working closely with Valentine as we progress our exciting exploration projects in Zambia,” Schirnding said on the appointment of Chitalu, 57.
Arc Minerals Limited is embroiled in a running legal battle with Zambian investors over the control of Kalaba Mine in North Western Province.
Local entrepreneur and investor, Mumema Mushinge, has led a consortium of Zambians that have sued Arc Minerals Limited over unpaid $5.8 million for shares sold in ZAMSORT, which owns Kalaba mine.
Arc Minerals Limited has been using some Zambian individuals to register surrogate companies to hold on to mining rights which by law they are supposed to surrender to the State following their legal expiry.
One such company is Handa Resources registered at the end of 2020, in which former ZAF commander Lt Gen Sande Kayumba is director. Other directors include Caleb Mulenga and Chitalu.
But sources say Arc Minerals hope by promoting Chitalu, a decision purely based on the outcome of the August 12, polls, it would help it galvanise State House support in trying to secure the mineral resource from indigenous Zambians.
Arc Minerals sources describe Chitalu as the “President’s man” and as a silver bullet for their legal problems and running battle with the communities in North Western Province.
Recently, senior chief Sailunga, Kelvin Mulunda, accused Handa Resources Limited of carrying out mining operations in his chiefdom without his consent.
This is contained in the chief’s application to be joined to the case in which Terra Metals and directors Mumena Mushinge and Brian Chisala have sued Zamsort Limited and Handa Resources Limited over Kalaba Mine in Mwinilunga.
The senior chief of the Lunda people of Mwinilunga complained that Handa Resource’s mining operations were a violation of his rights as the traditional leader and custodian of land.
Sailunga said his predecessor (late senior chief Sailunga) agreed with Mushinge and his company, Zamsort, that in exchange for the right to mine in his area, the company would undertake several projects within the chiefdom including rehabilitation of the road, building of a school and clinic as well as cash annuity.
Sailunga said in the affidavit filed in the Kabwe High Court civil registry that pursuant to the agreement, Zamsort began constructing a leach plant to process the ore that was to be mined.
Sailunga said in May 2021, owing to the current case, he came to learn that Mushinge and other directors had sold their shares in Zamsort, who indicated that it was supposed to continue with the agreement insofar as the development of the chiefdom was concerned.
“That after further consultation between my royal establishment and the first defendant (Zamsort), it was resolved to restore the mining consent to the first defendant and I subsequently rescinded my revocation,” Sailunga said. “That it has since come to my attention that even though I restored the first defendant’s consent to conduct mining operations in my kingdom, there is in fact, a 3rd party, the 2nddefendant herein (Handa Resources Limited) who also purports to have the rights to and has in fact has been conducting mining operations in my chiefdom as they have brought on site various rigs, drills and other equipment with which they have been conducting mining operations.”
Meanwhile, some board members of Arc Minerals want the dispute with Mushinge resolved quickly to avert growing resentment of the company evidenced by Chief Sailunga’s position on the legal dispute.
Sources close to the transaction say that some board members want Arc Minerals to pay Mushinge something ‘small’ as part of the plan to pursue an out of court settlement.
“They are very annoyed by Mumena’s persistence on the matter and others are even suggesting that maybe he be given the plant just to ensure he lets go of his pursuit of the matter in the High Court,” a source said anonymously.