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Arc Minerals
Lusaka ~ Thur, 4 Nov 2021
By Brightwell Chabusha
The Evangelical Youth Alliance (EYA) has petitioned the British High Commissioner to act on Arc Minerals’ alleged dubious business activities in the country.
In a letter dated 1st November, 2021, Evangelical Youth Alliance Executive Director Reverend Moses Lungu disclosed that the said company has been using Zamsort and two other companies as conduits at the stock exchange for making declarations and profiling its explorations at Cheyeza in Zambia.
Rev Lungu explained that Arc Minerals has 66 percent shares in Zamsort, 66 percent shares in Handa and 72 percent shares in Zaco, all three companies registered in Zambia.
He said the company is making millions of Pounds for themselves but this money does not come to Zambia because they are not interested in mining.
“Your Excellency, Arc Minerals is a company registered in the British Virgin Islands but listed on the London Stock Exchange. However, Arc Minerals has 66 percent shares in Zamsort, 66 percent shares in Handa and 72 percent shares in Zaco, all three companies registered in Zambia. In short, these three companies are subsidiaries of Arc Minerals and these are the entities that Arc Minerals has been using as conduits at the stock exchange for making declarations and profiling its explorations at Cheyeza in Zambia,” he said.
“Through this crooked business undertaking which is done in complicit with some corrupt elements at the Ministry of Mines in Zambia, Arc Minerals is making millions of Pounds for themselves but this money does not come to Zambia because they are not interested in mining. The London Stock Exchange is literally their market.”
Rev Lungu said according to the Mines and Mineral Development Act No. 11 of 2015 part 24, an exploration licence is only valid for an initial period of four years.
He explained that the Act further provides that an exploration licence may, on its expiry after four years, be renewed for two further periods not exceeding three years each, but the maximum period from initial grant of the licence shall not exceed 10 years.
Rev Lungu added that the same Act also says a holder of an exploration licence shall relinquish 50 percent of the exploration area at each renewal.
“Your Excellency, a perusal at the Patents and Company Registration Agency (PACRA) shows that the three companies have the same shareholders who have been exchanging licenses at every interval for almost seven years now. Arc Minerals is clearly not interested in mining in Zambia but they are only continuing with exploration,” he said.
“When their licence expires, instead of renewing and surrendering 50 percent of the area according to the law, they simply register a new company with the same shareholders, with the help of some corrupt officials in government. They have done a lot of drilling for almost seven years now. They have not reached the 10th year and by now, according to the law, they are only supposed to have 25 percent of the original area that they had in 2014. This is the crookedness that has robbed Zambians of millions of Kwacha.”
Rev Lungu said it is a shame that a company listed on the London Stock Exchange is involved in “this bribery” using the companies registered in Zambia where they own the majority shareholding which they are using as special purpose vehicles for bribery and corruption.
He charged that they started “this mischief” by opening Zamsort before the licence was given to Handa and so forth.
“They have been doing this with some employees at the Ministry of Mines who allow them to open other companies even when they know they are the same shareholders and they keep the same area size so that they can keep on raising money in London,” he said.
“Your Excellency, you may wish to know that their small scale mining licence was cancelled by the Ministry of Mines because Arc Minerals were not interested in mining. They appealed and they were supposed to commence production in April 2020 but since they do not like investing on mining, as they make easier money through drilling, they did not commence. They do not even employ anybody. They literally do not have an office and the two or three field workers they have are all consultants. As a result, they failed to meet the conditions of grant of appeal that they were given by the minister and they decided to abandon the mining license even when there was a willing buyer called Zambia Mineral Exchange which signed an agreement to buy the mine and continue production and employ people but they abandoned it.”
Rev Lungu charged that the company was helped to abandon the mining license by the Director of Mine Safety, Director of Cadastre, and the Permanent Secretary at the Ministry of Mines.
He said they abandoned it without following the environmental regulations which is posing a great health risk because there are still dangerous chemicals such as sulphuric acid there.
“Your Excellency, by law, when you abandon the project, you must involve all stakeholders and you have to restore the area to its original natural status and it is a big shame that a London-listed company, which is supposed to uphold anti-bribery, anti-corruption and also adhere to strictest environmental regulations, has found itself in such a big mess and it is very discouraging that we must even be contending this straightforward issue,” he said.
“What is more discouraging is the fact that regulators in the UK who have been informed about these breaches and corruption that Arc Minerals are involved in, have still allowed the company to continue trading as they have not suspended it or de-listed it from the stock exchange. We therefore seek your indulgence, as a matter of procedure, before we take this matter to higher authorities because Zambians are not benefiting from this. This rot must come to an end. This is why we have copied the Financial Intelligence Centre (FIC) and the Anti-Corruption Commission (ACC) in this letter, so that in case we do not get satisfactory assistance, the investigative wings can come in and facilitate the closure of these companies which are a conveyor belt for bad business practices.”
Meanwhile, Rev Lungu said the Organisation has no problem with Foreign Direct Investments (FDIs) but it has a problem with foreign companies that are churning out illegalities to enrich themselves at the expense of citizens.
He said he will not rest until justice is done to Arc Minerals because the country has been losing out from “these dubious businesses and we cannot sit and watch these irregularities taking place in our country and do nothing.”
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