Marange Resources sues Core Mining

Published: 10 August 2013

MARANGE Resources has obtained permission from the High Court to proceed with its US$2 billion lawsuit against Core Mining Resources and Minerals for financial prejudice after the latter allegedly misrepresented it had money to invest in diamond venture.

Last week, High Court Judge Francis Bere granted leave to serve Core Mining, under final liquidation, with summons through the service of the Sheriff of the Gauteng High Court.

The liquidators, Selwyn Trakman and Satish Roopa are also being cited as respondents. Marange, a State owned diamond miner is a subsidiary of Zimbabwe Mining Development Company. It partnered Core Mining to form Canadile in 2009 to exploit diamonds in Marange.

Mr Lovemore Kurotwi, a principal shareholder and director in Core Mining is alleged to have made false representation that the company was a subsidiary of Benny Steimetz Group Resources, a well established international mining company.

BSGR was to provide financial, technical, machinery support to the joint venture with Marange.

As a result, the ZMDC approved the joint venture believing that it was dealing with BSGR.

It was however discovered that Core Mining was not in any way related to BSGR and international mining firm had no interest in the project. In addition, Core Mining did not have financial and technical resources required for the joint venture project.

The guarantors of Core Mining's financial obligations were Yehuda Licht and Subrithy Naidoo who had no connections with BSGR, nor did they have capacity to honour their guarantee.

The joint venture was subsequently terminated in October 2010 because the agreements entered between the two were considered to have no effect from the beginning.

"As a consequence of (Core Mining) representations, (Marange) suffered serious financial prejudice in that (Marange) did not receive the expected investment in value of US$200 million in the joint venture which would have achieved a return of US$2 billion," according to court papers filed by Marange. "Had (Marange) known the true facts, it would not have signed the agreements.
- herald