Firm demands $1,2m over breach of contract

Business Reporter

A LOCAL mining company, Makaha Mining Co-operative Society is demanding $1,2 million from a Chinese consultancy as compensation for breach of contract over funding and mining equipment. Mahaka Mining Co-operative Society claims that Undertreasure Mining Consultants reneged on performing terms of a joint venture they signed in 2010 and therefore wants compensation.The two companies entered into a joint venture in 2010 terms of which included Makaha transferring 70 blocks of chrome – on 1 750 hectares – to Undertreasure in exchange for funding, mining equipment and marketing.

Under the joint venture agreement and correspondence between officials of the two companies and seen by The Herald Business, the transfer of the chrome blocks to Undertreasure was done so that the latter could access funding from banks in China since it is recognised in that country.

The agreement says that as soon as the transfer of the mining blocks was done, Undertreasure would provide Makaha Mining Society with a brand new 4X4 Nissan Hard Body and at least $100 000 as a token of appreciation for using the chrome mining certificates to source for funds.

They had also agreed that Makaha senior members would be incorporated into Undertreasure Mining Consultants as well as on the company’s CR14 which shows directors of a company.

It had also been agreed that Undertreasure would buy three houses in Harare’s low density suburbs, build three houses in Guruve for three Makaha directors and buy two more trucks for the directors as soon as production commenced.

Makaha said it fulfilled its obligations but Undertreasure has not honoured its part.

“We have been negotiating and requesting them to implement what we all agreed and signed for the past five years and nothing concrete has come up,” Makaha directors Godfrey Mukono and Ray Gavaza said in a letter dated July 1 2015.

“Kindly be advised that our investor (Undertreasure Mining Consultancy P/L) has breached our memorandum of agreement by not honouring what we all signed and agreed on (in) June 2010. Makaha Mining has suffered at least $1 224 550 in damages for loss of income since 2010,” Makaha directors said.

“In addition we need a brand new 4X4 double cab as indicated in our contract (and) not an accident damaged Nissan which they temporarily provided us with,” they said.

Contacted for comment a director of Undertreasure Mr Lei Nie would not comment but referred questions to his lawyers.

“I will forward this mail to my lawyer, thanks for your concern,” he said in an email response.