HARARE - Zimbabwe Platinum Mines Limited (Zimplats) has posted a $6,4 million loss in the half year to December 2012, in a development that could jeorpadise the indigenisation of the platinum miner in 10 years.

This comes as the platinum group metals producer officially distanced itself from Brainworks Capital Management (Private) Limited — a private equity investment firm that acted as financial advisor to the National Indigenisation and Economic Empowerment Board (Nieeb) in the $971 million deal.

George Manyere’s Brainworks is reeling after its $17 million consultancy invoice hit a brickwall, with Zimplats refusing to pay the cash saying it was Nieeb that hired the consultants and therefore must settle the bill.

Alex Mhembere, Zimplats chief executive, said in a press statement yesterday that his company has no contractual relationship with Brainworks and said it was not responsible for the payment of Brainworks’ fees for consultancy services rendered in relation to the indigenisation implementation plan (IIP).

“The company wishes to make it clear that neither it nor its operating subsidiary has any relationship with Brainworks,” Mhembere said.

“Brainworks was engaged by the National Indigenisation and Economic Empowerment Board (Nieeb) and acted for and advised Nieeb/the Government of Zimbabwe in the negotiations between Nieeb/the Government and the company in relation to the operating subsidiary’s IIP.

“Neither the company nor the operating subsidiary was involved in any way in engaging Brainworks to act as advisors to Nieeb/the Government.”

Further, said Mhembere, “neither the company nor the operating subsidiary agreed or undertook to pay any fees raised by Brainworks for consultancy services provided by Brainworks to Nieeb/the government.”

Under the deal, indigenous people must pay $971 million within a period of 10 years, failure of which the shares revert back to the owners of Zimplats. If indigenous Zimbabwe fail to pay the cash in 10 years, which is now almost certain given the dire financial situation reported by Zimplats, they will be given 10 days within which to pay cash or they will forfeit the shares.

Payment of the shares will come from 85 percent of the dividends declared by Zimplats over the 10-year period.

But already, Zimplats has posted a staggering loss, and has in the last 10 years only paid a total dividend of $50 million making it almost certain from the onset that the indigenous people will not be able to pay the $1 billion repayment to secure their 51 percent.

According to Zimplats’ financial statement, the miner registered a $68,4 million profit in the half year to December 2011.

But in its latest results, the group said in the half year to December 2012, it incurred a $6,4 million loss due to subdued platinum prices.

“Markets metal prices have remained depressed although there has been some recent improvement in response to the problems experienced by the major PGM producers in South Africa,” Zimplats said.

The Australia Stock Exchange-listed miner said turnover during the period under review slumped 23 percent to $176 million from $231 million on the back of lower volume of metal sales. - Gift Phiri and Eric Chiriga