Mar 30, 2023
South African Ex-Treasury Boss Helms Billion-Dollar Lithium Plan
(Bloomberg) -- The former head of South Africa’s National Treasury has been tasked with cleaning up a scandal-dogged company that’s contemplating partnering a Chinese battery maker in a $1 billion lithium operation.
Dondo Mogajane aims to restructure and improve compliance at Johannesburg’s Moti Group. Founder Zunaid Moti told Bloomberg his reputation is hindering the fortunes of a company that has a venture with Anglo American Platinum Ltd., chrome and lithium assets and property development businesses. He has stepped back from management.
Moti, 48, spent five months in a German jail in 2018 and 2019 after being arrested on an Interpol diffusion notice issued by Russia in connection with the alleged theft of a pink diamond. In 2012, he was charged with conspiracy to commit murder before the case was thrown out of court.
Moti, who was represented by Cherie Blair in the Interpol case, said he was arrested improperly on bogus charges engineered by a disgruntled businessman and a letter he showed Bloomberg from Interpol shows that he’s no longer subject to a notice from the organization.
“Everyone would not be associated with someone whom when you Google you just see is depicted as this gangster who drives Ferraris,” Mogajane said in an interview this month at Moti’s headquarters, which forms part of a complex upon which a decommissioned Mirage jet fighter has been mounted. Mogajane, who was courted for the position for over a year, said he was aware it came with “reputational risk” and told Moti: “We will have to run a proper business without you being there.”
The former Treasury director-general is the chairman of South Africa’s Government Employees Pension Fund, which has 2.3 trillion rand ($127 billion) under management. He’s also a board member at the New Development Bank, a multilateral lender founded by the BRICS group of countries.
Read more: South Africa Moves to Ease Fears Over Treasury Head’s Departure
Mogajane, who took up the Moti post in July, is reorganizing the company at a crucial time as it negotiates a venture based on its 10,000-hectare (24,711-acre) lithium concession in northeastern Zimbabwe with the Chinese company. An initial mining operation may lead to the establishment of a battery factory at a cost of more than $1 billion. The Moti group plans to retain 30% of the venture.
The deal will be a “game-changer” for Zimbabwe, he said. “We are negotiating with a well known electric-vehicle battery-manufacturing company, with clients that range from Tesla to BMW,” he said, declining to identify the firm because of confidentiality agreements.
Mogajane plans to seek an exemption from Zimbabwe’s ban on exporting lithium ore and start shipping the material to China this year and build a battery plant “in the medium to long term.”
The southern African nation, which has some of the world’s biggest reserves of the green metal, is banking on it to help revive a moribund economy. The price of lithium carbonate, the benchmark product, surged more than six-fold over the past two years to as much as $66,500 per ton, according to Benchmark Mineral Intelligence data. The metal has pared back those gains in recent months as supply started to catch up with demand.
Mogajane is also planning to expand the company’s Kilken Imbani plant, which re-treats mining waste at Anglo Platinum’s Amandelbult mine in South Africa to extract more of the precious metal, even though Moti Group is embroiled in a legal battle with a minority shareholder who wants to be bought out.
Moti said his time in prison gave him time to reset his priorities. The closing of his accounts with Absa Group Ltd. after his release from jail despite him having banked with them since he was a teenager showed him that retaining control wasn’t in the best interests of his family. Absa declined to comment.
“My reputation was hurting my children and it was not allowing my business to move forward,” Moti said in an interview at his house in an upmarket suburb of Johannesburg. “We don’t want to end up where my children are victimized because of my history.”
Moti still plans to run African Chrome Fields, in which Moti Group once had a venture with Zimbabwean businessman Kudakwashe Tagwirei, who has been sanctioned by the US and UK on corruption allegations. It will be separated from the group.
“I am going from the Moti Group,” he said. “I would rather now just get out of the boxing ring.”
--With assistance from Mark Burton.
©2023 Bloomberg L.P.