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Energy firm link to blood diamond
LONDON
Petroleumworld.com, Dec 31, 2007
A COMPANY that has just launched itself on the London stock market as a renewable-energy business is the same firm that became embroiled in the “blood diamond” scandals of the 1990s, in which illegally traded diamonds were used to finance civil wars in Africa, The Sunday Times has established.Energem Resources, with its head office in South Africa and registered office in Canada, used to be known as DiamondWorks. It changed its name in 2004 and gained its London AIM listing last month.
Canaccord Adams, the adviser that piloted it onto London’s Alternative Investment Market (AIM), is headed by Tim Hoare, who sits alongside rock star and champion of Africa Bob Geldof on the board of the television-production company Ten Alps. Hoare has been a board member since March this year.
The hedge fund RAB Capital owns nearly 25% of Energem.
If you thought diamonds were costly...
The stock-exchange announcement of Energem’s AIM debut said the company was concentrating on oil distribution, biofuels and “procurement, supply and logistics management to industry in sub-Saharan Africa”.It referred to diamonds only in saying that last month Energem had decided to give up diamond-exploration rights in the Central African Republic.
Three of the directors were said to have had experience in mining diamonds.
There is no suggestion that the present management had any involvement in the blood diamond trade – an industry at one stage reckoned to be worth $1 billion (£500m) a year – in which civil wars, notably in Angola and Sierra Leone, were fuelled by selling the gems to buy arms.
Page 129 of Energem’s 160-page AIM admission document discloses that Energem was “formerly DiamondWorks Ltd”.
And, in a brief corporate history, the document says that in 1997, the company’s main assets were “diamond exploration properties in Sierra Leone and Angola. The Angolan mines were in full production in 1997 and the Sierra Leone mines were in the process of commissioning when civil unrest in both these countries during 1998 effectively halted operations”.
DiamondWorks came close to bankruptcy and was the subject of a reverse takeover in 2001. Its present management team all joined after that rescue. A stake in a Sierra Leone diamond mining concern has been sold.
A spokesman for Energem said this weekend that “all connections with its DiamondWorks days have long-since been severed”.
In 2000, Peter Hain, then at the Foreign Office, named Tony Teixeira – now deputy executive chairman of Energem – in parliament as being involved in the illegal movement of diamonds and fuel in Angola.
Teixeira flatly denied any involvement in the trade and challenged Hain to repeat the allegations outside parliament.
The Energem spokesman said that the allegation had been investigated ahead of last month’s listing. “Mr Teixeira came out with a clean bill of health,” he said.
In the 1990s, DiamondWorks came under scrutiny in Sierra Leone for using the controversial South African-based mercenary provider Executive Outcomes to secure its diamond mines during the country’s prolonged civil war. The 1990s war, and the diamond trade that sustained it, also came under the Hollywood microscope in the 2006 film Blood Diamond.
In 1997, DiamondWorks’ largest shareholder was Tony Buck-ingham, a former British Army officer who introduced Executive Outcomes into both Sierra Leone and Angola. He was the inspiration behind the London-based mercenary outfit Sandline International. Sandline, which provided mercenaries, military training and arms, was being run by former Scots Guards officer Lieutenant-Colonel Tim Spicer. Sandline and DiamondWorks shared offices in London.
Also linked to DiamondWorks in the 1990s was Simon Mann, the Old Etonian who was later arrested in Zimbabwe accused of attempting to smuggle weapons to Equatorial Guinea to help stage a coup. Mann was DiamondWorks’ chief operations officer. Mann is still in Zimbabwe, trying to resist extradition to Equatorial Guinea.
A certification scheme was set up in 2000 with United Nations backing to stem the flow of blood diamonds from Sierra Leone where rebels used gems to fund the country’s 10-year war.
Energem said this weekend that, as far as it knew, Buckingham was not a shareholder.
The company is concentrating on renewable energy, and wants to farm jatropha, a plant whose seeds can be turned into biofuel.
It is growing jatropha in Mozambique, runs an ethanol plant in Kenya and has oil-refining and storage operations in Nigeria and Malawi.
Energem also has operations in Chad, Democratic Republic of Congo, Zambia and Zimbabwe.
Story by Ben Laurance from The Sunday Times UK
The Sunday Times UK 30 12 07
Copyright© 2007 Petroleumworld. All rights reserved.
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