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Moti Group suspected Zimbabwe lithium concession held no lithium before it sold a stake to investors

South Africa’s Moti Group announced plans to start mining lithium in Zimbabwe and build a US$1-billion battery factory, but executives suspected there was no lithium at the site, a report says.

In a “sponsored” article in a South African news website, Moti Group’s CEO Dondo Mogajane was quoted as saying that the project would be a boon for Zimbabwe’s struggling economy and create jobs for impoverished Zimbabwean workers. But in private, Moti Group top executives had expressed doubts that their concessions held any significant lithium deposits, according to internal corporate communications obtained by OCCRP reporters.

Included in the leaked files from the South African conglomerate’s head office in Johannesburg is a recording of a September 2022 phone call between its founder, Zunaid Moti, and an executive in which the concessions are mentioned. Moti can be heard saying “there is f***-all there.”

Moti denies the claims and says the OCCRP report has manipulated information.

With an eye to cash in on the booming electric vehicle sector, the Moti Group purchased scores of concessions in Zimbabwe in 2018 and 2019, which would be explored for lithium.

In 2022, China’s Yibin Tianyi Lithium Industry Company — a subsidiary of the world’s biggest electric vehicle battery supplier, Contemporary Amperex Technology Co. — agreed to buy 20% of the Moti Group’s Zimbabwe subsidiary, Pulserate Investments.

The purchase agreement stated that Pulserate would carry out exploration, mining, and processing, and that the Chinese investor would have the option to buy another 50% of the company based on the exploration results.

A spokesperson for Yibin Tianyi declined to answer detailed questions about the agreement it signed with the Moti Group, but said the company was no longer involved in Pulserate. The Moti Group told OCCRP the deal has been restructured and Yibin Tianyi has been replaced by its parent company, Contemporary Amperex Technology, which did not respond to requests for comment.

‘Conceptual’ Deposits
In the sponsored article, Moti Group CEO Mogajane framed the Zimbabwe lithium plans as a boon for the local economy.

But the Moti Group still has not announced any lithium discoveries in its concessions. Furthermore, the leaked files also show that initial projections for Pulserate’s concessions were not based on extensive field work, but rather on two “conceptual” studies prepared by Minxcon Pty Ltd, a South African mining consultancy.

One of the emails obtained by reporters shows that Pulserate executives wanted to compare the potential value of their concessions –– comprising almost 10,000 hectares (24,710 acres) –– with that of Arcadia, which was developed by an Australian firm that sold to a Chinese company for nearly US$378 million.

The leaked emails show Minxcon warned Pulserate that it made little sense to compare its concession area to Arcadia, which was 140 kilometers away.

“Geologically speaking, the mine and your claims are entirely unrelated, and you cannot infer indicative further value from Arcadia to Pulserate,” geologist Maria Antoniades wrote in a July 2021 email. “I do not know how to present Arcadia information that would add any value to your project.”

But Minxcon did agree to provide a presentation, and Pulserate received a “Review of Lithium Claims vs Arcadia Project” a few months later. Even then, the Minxcon geologists were sceptical, writing in the presentation that “values and assumptions are at the conceptual level.”

“There is no certainty that the Assessment and value stated in this presentation will be realized,” the presentation said.

Asked for comment on the presentation, Minxcon told OCCRP that it had underscored Antoniades’ comments in her 2021 email: “The presentation corroborates and explains the point made in the email, i.e., that the value of the Pulserate project could not be compared directly with Arcadia because Arcadia is in a far more advanced stage of development than that of Pulserate.”

‘Good Days’
Aside from the concerns in the Minxcon presentation, Moti Group had received an exploration report suggesting another of the Pulserate concessions was likely devoid of lithium. That concession was an abandoned mine called Good Days, and Moti Group was also in a legal dispute over its ownership.

Moti Group’s ownership of Good Days was a key factor in closing the deal with the Chinese. The deserted mine had yielded gemstones in the 1950s and 60s, and old mining records suggested lithium could be present at the site.

The leaked files show that, in July 2021, Minxcon prepared a separate study for Pulserate, which was based on the historical records of the Good Days site and a site visit in 2018. Minxcon extrapolated from that data the potential lithium deposits for about one third of Pulserate’s 84 concessions. Minxcon also took into account estimates of lithium deposits in similar-sized sites around the world.

The Minxcon geologist reported that it was possible the Pulserate claims could contain anywhere from around 200,000 tons –– next to nothing –– to over 5.6 million tons, which would be highly lucrative.

“The wide range in the exploration target illustrates that there is low confidence due to the limited information available at this stage,” they wrote, noting that “exploration target ranges are conceptual in nature.”

In its response to questions from OCCRP, Minxcon said that an “informed reader” of its study would “understand that the ranges imply that the estimation is of low confidence and high risk.”

Leaked audio shows top Moti Group executives fretting about the possibility of the Chinese pulling out of the deal if Pulserate lost control of the abandoned gem mine.

“We must find a way to keep the US$6 million,” said executive Salim Bobat in a meeting in August 2022, referring to Yibin Tianyi’s payment to the Moti Group for 20 percent ownership of Pulserate.

Reporters were not able to independently confirm how much Yibin Tianyi had paid for its Pulserate shares. However, the Share Purchase Agreement mentions a $6 million first installment, which would be followed by another $4 million payment within 240 days of the shares being transferred. Another $20 million would be used later for “exploration work.”

In the same meeting, another executive, Natalie Graaff, suggested the Moti Group could simply hand over Pulserate entirely to Yibin Tianyi’s founder and major shareholder, the Chinese billionaire Pei Zhenhua, as compensation if a court were to rule that the rival company owned Good Days.

“I would say he can have Pulserate,” said Graaff according to an audio recording of the meeting. “We don’t care. You know, because we know there is nothing there.”

The leaked files show that, even as executives were reassuring the Chinese that they owned Good Days, they suspected that the abandoned gem mine had no notable lithium deposits.

A few years earlier, Prospect Resources, the Australian firm that developed the Arcadia mine, had also been interested in buying Good Days, and company geologists had done some exploration at the site. The results were not encouraging, and Prospect abandoned the deal.

Pulserate was sent Prospect’s negative report on the mine site in September 2021, eight months before it finalized the deal with Yibin Tianyi in May 2022.

In a leaked recording of a call that took place in October 2022, Moti Group COO Mark Beukes admitted to Moti Group’s lawyer that Good Days was likely empty of lithium as well as gemstones.

“There’s jack shit there, just rock,” said Beukes.

In his emailed response to questions from OCCRP, Moti said that the deal with Yibin Tianyi was premised upon carrying out two years of exploration.

“The whole purpose of the transaction with Tianyi was to identify if there were indeed any resources of commercial significance within the 10,000 (hectares) of claims owned by Pulserate,” he said.

“Until such a time as these exploration activities were completed, nobody could truly make any objective assessment of the value of Pulserate’s claims,” Moti added.

Reacting, the Moti Group denied the claims.

“The leader of this company, Pei Zhenhua, is one of China’s richest and most successful entrepreneurs. The Moti Group is one of the most successful black-owned businesses in South Africa. And it is indisputable that Zimbabwe is a country with massive mineral resources.

“In fact, the aforementioned Chinese company had brought its own lawyers and geologists in person to the site in the Mashonaland East province, where they spent extensive time conducting their own due diligence on just a minute portion of the reserve. And in reality, the Good Days reserve mentioned by amaBhungane is worth millions of dollars alone. And so, while the terms of the company’s partnership with the Moti Group have changed, it has chosen to remain a minority shareholder.” – (newZWire)

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