OVER 200 contractors have threatened to take the law into their own hands and confiscate whatever assets they can to recover the US $18 million owed to them by Mabiza Resources, operators of Munali Nickel Mine in Southern Province.

The contractors say they have finally arrived at this decision because they have exhausted almost all the formal avenues, including the courts, but still nothing fruitful has come out of it.

But Consolidated Nickel Mines (CNM) chief executive officer Anton Mauve has stressed that he is doing everything possible for the company to dismantle the outstanding debt, explaining that the huge stock of arrears was as a result of reckless management, who allowed the mine to access supplies on credit.

In an interview, suppliers’ representative Andy Mtonga, who was flanked by Richard Mwenya and Brian Chanda, appealed to government to take over the mine, as it did Konkola Copper Mine (KCM), if the current owners had failed to run it.

“We can assure you if government is interested in this and not even the government, the President (Edgar Lungu) or the (Mines) Minister (Richard Musukwa) takes supervision of that mine, they will pay. If government took supervision, the way they did with KCM, we will see how things will turn around. There won’t even be a week that will go by, all of us will be paid. So, it’s better if government takes over, that’s all. We are doing business with KCM and things have changed at KCM, we know that they are struggling, but they are paying, they are on current. If they delay, it’s 90 days, but they are paying,” Mtonga said.

“After we had the meeting in March, they said, ‘in May they will start paying, they will clear most of the debt…’ Today is July and they have not paid even one cent! So, we have decided, we have been to the Ministry of Mines and nothing has come out of it so we decided to write to the British High Commissioner (Nicolas Woolley), we did that last week, and we have heard nothing from them. We also sent that copy to the Ministry of Mines, we heard nothing from them. So, yesterday, we sent a letter to the PF secretary general (Davies Mwila) because the next thing, now, is we are going there and we are going to grab what we have to grab! We are going to close down that business! So, we don’t want to be seen to be working against government, no. We want this to come to an end and the only way it’s going to come to an end is government intervention or we take things into our own hands!”

He alleged that the Mazabuka-based mine was generating sufficient revenues amid high Nickel prices on the London Metal Exchange (LME), which had leaped to US $13,716 per tonne from over US $11,055 by March 31, this year.

“The actual price of Nickel on the LME is twice the price of copper. So, we can see on a minimum, every month, they are making US $5.4 million, this is a worst-case scenario. There is no way the mine can be producing one truck a day, they do more! And the problem is that they are not banking in the country so government can’t see what they are making because they are banking in the UK or whatever and they only talk about bringing US $500,000 to pay salaries and stuff like that when we know for a fact that why are making more than US $5 million,” argued Mtonga.

“So, now, you see the situation that these guys have been, like he said, from January, 2019, we financed the mine until they started selling; their first truck left the mine in May, 2019, the moment they started selling the concentrates in May, they started kicking out all those, who had invoices building up and they started slowly phasing out and they are now dealing with new suppliers. So, every time there is a rift between the supplier and them, they fail to pay, they don’t engage the supplier, they look for an alternative supplier and continue. So, that supplier is kicked out and the money is not paid and that’s the situation. We understand it’s their business decision to change suppliers, fine, but then, those that have done the business should be paid.”

In a letter addressed to Mauve, the contractors gave him an ultimatum of five days to respond to their concerns or risk having the aggrieved contractors use their own means to recover their funds from the mine.

“Our position for a long time we have listened to your updates and endured your arrogance, crookedness and silence. You have been given an opportunity to redeem yourself using amicable means, Mr Mauve, but you have chosen otherwise. You have your strategy, and we have ours. The suppliers have resolved as follows: We will obtain our funds by formal or informal means! It is our money. We are almost exhausting all formal avenues, sending an official letter to you is also one of the steps. Though it is the most preferred approach, please note that our success is not dependent on your response. We are not settling for anything other than 100 per cent settlement for each supplier. We are not interested in creating opportunities for further engagements with your team. You have proved to be very unreliable with the opportunity you have been given. In the settlement of our debt, all suppliers shall be treated equally without discrimination,” read the letter in part.

“Mr Mauve, we have given your office an ultimatum of five working days from tomorrow, Friday July 31, 2020, to respond to this letter after which date, all doors for potential negotiation will be closed! At that point, we will take it upon ourselves to recover the funds. Your response to this letter should be officially signed and in writing. You will utilise the below stated e-mail address and contacts. Yours faithfully, Disgruntled Mabiza Suppliers Committee (Zambia).”

But when contacted for a comment, Mauve bemoaned the poor manner in which the operation was managed during the time the debt was accrued, and disclosed that new management, in collaboration with him, had come up with a plan to ensure that the debt was restructured and dismantled as quickly as possible.

He explained that the company was prioritising the recovery of the suppliers’ cash and a plan to have the funds paid was likely to be approved unanimously by the board with only three members left to vote on the plan.

“…And so, obviously, the plan needs to be funded and that is where you are basically asking the investors to dig deep and put some more money in the restructure plan for debt. But it looks like that is being accepted by the board. It hasn’t been resolved yet, but it does look bright. I am on a call again this (Thursday) afternoon, I’m on a call every single day to try and get these guys over the line, and I have agreed and three of my other directors have agreed, but we need three more to have a unanimous position and then that will trigger the mechanics of the plan we put together. That is, we will give all the press the details of the plan, but firstly, we have to put the details to the owners of the money, they have to decide if they accept that plan or not and so the expectation is that this should be done within the next couple of days and most of the groundwork has been done to make sure that the plan is sound. It can be well-communicated and it is something that the mine can afford and that meets suppliers’ expectations,” said Mauve in a separate interview.

“I have been here since November, last year, trying to rectify some very poor management that occurred since the restart, which was in December, 2018. It is irresponsible of the previous management to have got as much debt as that. What you are basically doing is you are taking supply of certain goods in credit then stretching that credit to ridiculous levels, and a mine this size, if we look at our cash flow model, shouldn’t carry more than US $8 million. And so, when you have a debt of US $18 million that the previous management didn’t even realise they had accrued, it’s unforgivable and we’ve been very harsh with those guys! I can only sympathise with the suppliers and through people like you (the media), make it very clear that we are actually committed until we are forced to close because we simply cannot meet expectations or until we are super successful and able to very rapidly pay it all off.”