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This in Saturdays West Australian
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It's a localised thing (right)



Bond mine faces $3m in debts
13th June 2009, 9:00 WST

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The Lesotho diamond mine which helped return Alan Bond to the ranks of Australia’s ultra-rich faces financial ruin after failing to pay more than $3 million in debts to small African companies.

Kao Diamond Mine (Pty) Ltd, which holds the rights to mine the vast Kao pipe, was the jewel in the crown of Bond’s diamond venture Global Diamond Resources after being commissioned in late 2007 amid claims it held diamond reserves of at least 10.2 million carats.

But the High Court of Lesotho has ordered its provisional liquidation and handed control of Kao to South African-based lawyers after receiving petitions from three African companies which are owed 21 million Lesotho maloti ($3.3 million) for mining services.

Other creditors have also made claims against Kao, including a catering company which claims to be owed about $80,000 for feeding the mine’s workers.

Gibraltar-based Global Diamond Resources, which was started by Mr Bond and fellow former Perth bankrupt Robert Leslie Nelson, is understood to be attempting a rescue deal despite having lost almost £13 million ($26 million) in the 2006 and 2007 calendar years.

Speaking from London yesterday, Mr Bond said he was only a consultant to GDR and couldn’t comment.

“I’m not a spokesman for the company any more,” he said.

“It’s a localised thing, as far as I know, and it’s just about resolved. You get these in these countries from time to time.”

Companies linked to the Bond family have been paid big amounts of money from GDR despite its failure to list on a major European market. The company’s 2007 annual report reveals that Bond-linked companies received millions of dollars in consultancy and management fees each year.

Alan Bond’s son Craig is also the single biggest shareholder in GDR, which was once valued at about $500 million.
The Bonds’ Strategic Investments Limited is paid £40,000 ($80,000) a month to provide office facilities in London, while it received £235,000 ($470,000) in management service fees and another £517,000 ($1.03 million) for legal services and advice during 2007.

Another Bond family company, Miramas Services, is paid £250,000 ($500,000) a year to provide Alan Bond’s services to GDR.

Meanwhile, GDR has agreed to pay £16 million ($32 million) to Bond family-linked company Greenstone Diamonds Limited for access to diamond concessions in the Democratic Republic of Congo and Bond-linked Valetona International Limited will receive 5 per cent of the sale proceeds of all diamonds recovered from the Congo under an exclusive marketing deal.

It is not known how much of this money flowed to Mr Bond.

But the Kao mine is GDR’s prime asset and Kao’s court-ordered provisional liquidator Dan Roberts said there were several groups looking to prevent Lesotho’s High Court from ordering its final liquidation.

The court has already granted the company, which is 93 per cent owned by GDR’s Mauritius-based subsidiary and 7 per cent owned by Lesotho’s government, several extensions since the petition was first filed in March.

“It might be liquidated,” Mr Roberts told The West Australian. “The application is not opposed at this stage but there are, what shall I say, interested parties who would like to contribute financially to see whether they can’t get the mine out of trouble and for that reason a final order has not been requested from the court yet.

“So it’s just postponed to see whether there is a good buyer or, let me also say this, or that the present shareholders of the mine may come up with the money to contribute to pay all creditors.”

PERTH
SEAN COWAN