5 January 2016

Swaziland: Swazi King's Personal Gold Rush

Swaziland's King Mswati III stands to personally make up to US$65 million if a reported gold mine deal in his kingdom is successful.

The Observer on Saturday, a newspaper in effect owned by the King, reported that a gold mine on Lufafa Mountains, near Pigg's Peak in the Hhohho region, was estimated to contain 251,000 ounces of gold, said to be worth more than E4 billion (US$263 million).

The newspaper said a company called Lufafa Mine Pty Ltd would run the mining operations.

In Swaziland the law is that King Mswati, who rules as sub-Saharan Africa's last absolute monarch, owns 25 percent of all mining companies in his kingdom. On that basis his share is worth US$65 million. In theory the King holds this 'in trust for the Swazi nation,' but in reality he uses the money to support his lavish lifestyle. He has 13 palaces, a private jet, a Rolls Royce car and fleets of BMW and Mercedes-Benz cars.

Meanwhile, seven in ten of his 1.3 million subjects live in abject poverty with incomes of less than US$2 per day.

Lufafa Mine Pty Ltd, the company that will run the mining operations, comprises SDZ Holdings LCC, the Swaziland Government and the King.

King Mswati has been mired in controversy over his dealings with foreign investors. In 2011 the Ngwenya Iron Ore Mine was opened but was forced to close in 2014. King Mswati held 25 percent of the operating company Southern Africa Resources Ltd (SARL) 'in trust' for the Swazi nation.

In April 2012, the King took US$10 million from the company as an advanced dividend against future income. Within weeks, the King spent US$9.5 million on a McDonnel Douglas McDonnell Douglas DC-9-87 private jet.

The company was forced to cease trading in August 2014 amid much acrimony. A compensation claim for at least US$141 million has been prepared by SARL against the Kingdom of Swaziland at the International Centre for Settlement of Investment Disputes (ICSID).


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