River Ranch files for liquidation

Rani Investment, majority shareholders in Limpopo Minerals, yesterday said the Beitbridge-based diamond mining company could no longer sustain operations as a going concern.   
Chief executive Mr Salim Bitar said they have been subsidising the running of the mine while negotiating the sale of its shares first with Limpopo’s minority shareholder, Khupukile Resources.
Limpopo Minerals gave Khupukile Resources the first option to purchase the shares, and then with the Zimbabwe Mining Development Corporation.
Mr Bitar said negotiations with the ZMDC had not yet been concluded but, with no offer having yet been made, the shareholders had decided it best to apply for liquidation.
“If ZMDC wished to acquire the mine, it could continue negotiations with the court-appointed liquidator,” he said. Rani Investments with interests in the hospitality sector said it needed to realign its financial and management resources to focus on its core business in Zimbabwe and the region.
Rani Investments have been having problems with Bubye Minerals over several loans advanced to it resulting in a legal wrangle lasting for almost a decade.
Bubye mined diamonds at River Ranch since 1992 and went into voluntary liquidation in 1998 but was redeemed in 1999 in terms of a deed of compromise.
The High Court then permitted Bubye Minerals to continue mining the dumps at River Ranch in order to recover diamonds to enable it to pay the creditors of River Ranch.
Bubye Minerals required funds to finance mining operations and to pay creditors as per the compromise agreement.
This was the time it approached Rani for funding. Rani granted four loans to Bubye.
The liquidation of Limpopo Minerals comes at a time when Government is working on the revival of closed and distressed mining companies.
Analysts said ZDMC is likely to pursue the take over of the operations at the mine in a bid to boost diamond output into the fiscus.
Zimbabwe is also leveraging on diamond to boost its revenue collection. This year alone Government was targeting to collect an estimated US$600 million from diamond dividends.