The Namibian Ministry of Mines and Energy is facing claims for losses and damages of more than R89-billion — nearly three times Namibia’s gross domestic product — after it allegedly illegally cancelled exclusive prospecting licenses (EPLs) held by a small local diamond-mining outfit in the Skeleton Coast Park.
The licenses were then awarded to an unknown company that previously traded only in meat products.
Nambib Resources, a local subsidiary of a group of international private investors, this week obtained a hearing on August 27 to set aside Minister Jesaya Nyamu’s decision to cancel its EPLs and award them to Trade Line Namibia.
Trade Line counts among its shareholders the Governor of the Bank of Namibia, Tom Alweendo, two Swapo luminaries and the unknown International Minerals of Maryland, United States, is the majority shareholder.
According to court documents filed by Nambib Resources, in 1999 the company obtained the right to prospect for diamonds in the Skeleton Coast Park. De Beers had mined the area between 1954 and 1967, but appears to have abandoned it in favour of more lucrative returns at Oranjemund.
After a slow start Nambib started showing promising yields late last year, discovering about 3 750 carats in one area. But rumours abounded that Nambib was processing blood diamonds and late in February the claim was raided by a large contingent of the local diamond police.
The manager and operator were arrested on various charges of technical violations of the Diamond Act, and Nambib’s diamonds were confiscated.
But once in court, the state’s case collapsed. The diamond police conceded that they had no grounds for conducting the raid, much less to confiscate Nambib’s production.
Counsel for the defence argued that the ministry’s top officials were conducting their business in a willy-nilly fashion, with no standard administrative procedures followed.
A month after the criminal case commenced Nambib was informed by the Ministry of Mines and Energy that its EPLs were to be cancelled for unspecified ”non-compliance” of the company’s work programme on its claims. Despite warnings from Nambib’s counsel that the ministry was acting illegally, the EPLs were all cancelled on May 22.
The state was forced to concede the case late last month — but on July 10 Nambib’s EPLs were awarded to Trade Line Namibia.
In an affidavit filed by Nambib MD Bruno de Vicentis, he said he was introduced to ”a group of American investors” fronted by a certain John Kamya in February this year. Kamya, who purported to represent a Maryland-based company called International Minerals, wanted to buy into Nambib’s venture, but could not supply satisfactory proof of financial resources to Nambib, De Vicentis said.
Closer inspection of records filed with the Registrar of Companies showed that International Minerals holds 70% of Trade Line Namibia, which was previously registered as a company whose main business was the trading of cattle and goats.
This was amended on May 16 to include ”mineral prospecting and related activities”. Alweendo and the Swapo-linked shareholders were appointed on the same day, company records show. No official registration of International Minerals could be found in Maryland. Another, unrelated, company with the same name but dealing in scrap metal is registered in Pennsylvania.
Trade Line Namibia?s attorney said his client was acting within its rights and would oppose the application. Former Judge Theo Frank is acting as senior counsel for the ministry and Trade Line Namibia.