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Africa Last Updated: Nov 24, 2023 - 11:59:47 AM


‘Just Rock’: Moti Group Suspected Zimbabwe Concessions Held No Lithium Before Announcing $1B Battery Factory
By AmaBhungane and OCCRP,  21 September 2023
Sep 22, 2023 - 10:48:10 AM

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South Africa’s Moti Group has announced plans for a $1 billion lithium battery factory in Zimbabwe. But leaked internal communications show executives casting doubt on their own mining concessions before they brought a major Chinese investor on board.

Key Findings


    Leaked audio recordings reveal that top Moti Group executives suspected their Zimbabwe mining concessions were likely empty of lithium.
    Consultants’ reports on the potential value of the concessions were based on little actual data.
    Despite the findings revealed in the leak, the Moti Group recently announced plans to begin mining and build a battery factory, which it said would bring jobs to Zimbabwe.
    Moti Group sealed an exploration agreement with a Chinese investor despite doubts that the concessions held lithium.
    The South African conglomerate’s founder, Zunaid Moti, dismissed the leaked files, saying he “continues to believe” in the project.
In May this year, South Africa’s Moti Group announced plans to start mining lithium in Zimbabwe and build a $1-billion battery factory along with a Chinese partner.

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 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 fuck-all there.”

A flashy tycoon with a penchant for luxury cars, Moti has built a business empire spanning sectors such as real estate, security, and aviation, as well as mining.

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. Lithium is a key element in the rechargeable batteries used for electric vehicles, and has become a hot commodity worldwide.

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

The purchase agreement, signed by both parties in May that year, stated that Pulserate would carry out exploration, mining, and processing, and that the Chinese investor would have the option to buy another 50 percent of the company based on the exploration results.

The agreement was among a cache of internal Moti Group files obtained by OCCRP’s South African media partner, amaBhungane. The files –– including audio recordings, company files, and corporate communications –– reveal the company was presented with studies even before exploration suggesting that its concessions held no meaningful lithium deposits.

“The allegations raise questions around the Moti group and its operations and whether they are above board,” said Karam Singh, executive director of Corruption Watch, a South African non-profit.

In an emailed response to questions, Moti said that Yibin Tianyi geologists were “allowed unfettered access to the entire area covered by the Pulserate claims.”

“The value of anything contained in the Pulserate Claims could only be established once proper mapping, trenching, drilling and assaying had been undertaken and evaluated,” Moti told OCCRP.

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.

The Moti Files

Earlier this year, amaBhungane began publishing stories about the Moti Group’s controversial dealings in Zimbabwe, based on internal company information provided by a whistleblower. The Moti Group took legal steps to stop amaBhungane from using the documents, arguing that they were “stolen.” A South African court initially agreed, and ordered amaBhungane to return the documents and stop publishing stories. However, a High Court judge rejected that order in July, calling it “an abuse of the process of court.” Moti has subsequently approached South Africa’s apex Constitutional Court for leave to appeal. The court has not announced a decision on whether it will allow an appeal.

‘Conceptual’ Deposits

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

“Simply extracting the ore and sending it to China in containers is not sustainable in driving socioeconomic development,” Mogajane said in the article.

“Instead, one of our immediate focuses in the region is on job creation, which will remain a priority at every stage of the venture, from the mineral exploration stage to mining and even setting up a battery manufacturing plant.”

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 a mining area called Arcadia, which was developed by an Australian firm that sold to a Chinese company for nearly $378 million this year.

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 skeptical, 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.”

There was another problem with Good Days. Official maps showed that this mine fell in land bordering the Moti Group’s concessions, not within them. A rival company claimed to own Good Days, which led to a court battle in Zimbabwe that the Moti Group won in July this year.

Before that verdict, back in early 2022, the Moti Group was already working hard to prove to its Chinese investor that it owned Good Days — which was considered the most promising exploration target within the sprawling collection of mining claims held by its subsidiary, Pulserate.

“The old Good Days Mine has been selected as highly prospective and it falls within this claim area,” Pulserate wrote in an April 2022 response to the investor’s queries.

But the legal dispute over ownership of the mine still worried Yibin Tianyi.

“We are mostly concerned about the potential overlapping of mining claims for Good Days area with competing mining claims held by certain third parties,” read a list of “key issues” prepared by Yibin Tianyi before the Share Purchase Agreement was finalized in May 2022.

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 $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.
Reputational Damage

In March this year, Moti announced he had “stepped away” from public leadership of the sprawling group bearing his name and owned by his family after a series of what he called false “criminal allegations” had damaged his reputation.

The Moti Group replaced him as CEO with Mogajane, the highly-regarded former head of South Africa’s National Treasury. Mogajane appears to have jumped into damage control with his public announcement of the Moti Group’s plans to start lithium mining and build a battery factory in Zimbabwe.

In the meantime, the Pulserate project’s future has become even shakier.

Mogajane told OCCRP that Moti Group’s deal with its Chinese investor has been restructured. Yibin Tianyi has withdrawn and been replaced by its parent company, Contemporary Amperex Technology, which has reduced its ownership stake.

It was not possible to confirm information about the restructuring due to the difficulty in obtaining corporate records in Zimbabwe.

The Chinese investor did not respond to questions about why it exercised its option to restructure the deal and lower its stake in the company, including whether a lack of evidence of lithium in the Pulserate concessions influenced the decision.

In his responses to OCCRP, Moti maintained optimism, saying that exploration by geologists has so far yielded “positive feedback on their progress and the prospects of the project.” He declined to share the geological reports, citing business confidentiality.

“The Moti Group continues to believe in the Pulserate Project, and is continuing its exploration efforts and doing the necessary test work required to develop its project,” Moti said.


Source:Ocnus.net 2023

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