HomeBase MetalsZimbabwe may take over Blanket mine

Zimbabwe may take over Blanket mine

Number Four Shaft
at Caledonia’s Blanket
gold mine, which the
Zimbabwean government
says it is taking over
Harare, Zimbabwe — MININGREVIEW.COM — 19 December 2011 – The government of Zimbabwe is considering paying an amount of US$3.7 million to the Caledonia Mining Corporation and assuming ownership of the Canadian-based company’s Blanket gold mine in Zimbabwe.

“The Herald” newspaper reports that the Toronto Stock Exchange-listed company’s chief executive Stefan Hayden stirred a hornets’ nest after allegedly labelling indigenisation “a political gimmick” ahead of elections scheduled for early next year.

“If Zanu-PF plays the indigenisation card now, then, come the elections, there is nothing left to play,” Hayden was quoted as saying.

Asked when his firm expected to complete discussions for indigenisation of Blanket Mine, he is alleged to have said they “will continue until before elections.”

The gaffe riled youth development, indigenisation and empowerment minister Saviour Kasukuwere, who threatened a government takeover of Blanket Mine.

Foreign-owned firms are compelled by the Indigenisation and Economic Empowerment Act to localise at least 51% of their shareholding.

The newspaper report added that Caledonia, sensing the impending danger, pressed the panic button and splashed press statements refuting that its chief executive had allegedly labelled indigenisation a political gimmick ahead of elections next year.

“Caledonia and its chief executive categorically deny having made any statements to the effect that he and Caledonia are not wholly committed to rapid implementation of indigenisation of the Blanket mine,” the statement said.

But Kasukuwere said retraction of the alleged statements would not change matters and government had decided to take over the mine.

“That doesn’t change anything. We are going to sit down and see how we can take over the mine. We will pay the US$3.7 million they paid the previous owners,” he added.

Hayden said Caledonia, which is set to produce at least 40,000oz of gold next year, will increase this by more than 10% in 2013. Output “may be a bit higher than” 45,000 to 46,000 ozpa in two years’ time, he added.

The company has the capacity to lift production to 70,000ozpa at its mill, if it can feed it with enough ore at the current grades it is mining.