Premier African Minerals’ turbulent investment narrative continues to unfold as the company has been informed that the Ethiopian Ministry has revoked the Mining and Licence Agreement (MLA) of Circum Minerals Limited, the potash developer in which it holds an indirect stake, Mining Zimbabwe can report.
By Rudairo Mapuranga
According to an official update, Circum’s MLA has been cancelled by Ethiopian authorities despite the declaration of force majeure that has been in place since 20 September 2022. Circum, which has a significant potash development project in the Danakil Basin, is partly owned by Vortex Limited — the vehicle holding Premier’s 13.1% stake, equating to a 4.8% effective interest in Circum.
Vortex holds 36.7% of Circum’s issued shares following a share swap agreement finalised on 10 February 2022. Premier’s interest in Vortex was last carried at a value of US$501,000 as of 30 June 2024.
In response to the licence revocation, Circum has declared a dispute, triggering arbitration proceedings as per the terms of the MLA. Renowned international law firm Boies Schiller Flexner has been engaged to represent Circum in the matter.
George Roach, CEO of Premier African Minerals, expressed his belief that Circum’s Danakil Basin asset still holds promise:
“This property has great potential, and we believe it will become a producing mine. Based on the facts as they have been explained to Premier by Vortex, we believe that the MLA should in due course hopefully be restored to Circum.”
A Compounding Setback
This development adds to Premier’s mounting challenges. The company is already managing setbacks at its flagship Zulu Lithium Project in Zimbabwe, where it has faced production delays and financial pressure under the terms of a contentious offtake agreement with Canmax Technologies. The revocation of Circum’s licence is yet another blow to Premier’s asset portfolio and investor confidence.
While arbitration may ultimately yield a resolution, the process could be lengthy and further dampen the short-term valuation and outlook of Premier’s diversified interests.
With over US$500,000 still tied to its indirect interest in the Danakil potash venture, Premier will now be hoping the dispute’s outcome will not render that investment a write-off — and that Circum can resecure the rights to what is considered one of the world’s largest undeveloped potash projects.
