Govt considers taking over Blanket Mine

Canadian firm’s local unit Blanket Mine.
The Toronto Stock Exchange-listed company’s chief executive Mr 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,” Mr 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 Government takeover of Blanket Mine.
Foreign-owned firms are compelled by the Indigenisation and Economic Empowerment Act to localise at least 51 percent of their shareholding.
Caledonia, sensing the impending danger, pressed the panic button and splashed Press statements refuting 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 Minister Kasukuwere on Wednesday 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, see how we can take over the mine. We will pay the US$3,7 million they paid the previous owners,” he said.
Minister Kasukuwere has warned foreign-owned mining firms operating in Zimbabwe, but fail to comply with laws that Government would compensate them for improvements and takeover ownership of the mines.
“If you do not comply (with indigenisation requirements) the Government will take over – simple and straight forward,” said Minister Kasukuwere.
He was addressing chiefs and the media after Mimosa Mining Company agreed to give Zvishavane communities a 10 percent stake in part fulfilment of requirements to localise its ownership.
The minister said indigenisation was a Government policy to mainstream locals into the economy and create jobs for total employment.
Blanket Mine was bought from another Canadian firm, Kinross, for a purchase consideration of US$1 million plus 20 000 000 Caledonia shares. Kinross acquired the mine from Falconbridge Gold Corporation in 1993.
Mr Hayden said Caledonia, which is set to produce at least 40 000 ounces of gold next year, will increase this by more than 10 percent in 2013.
Output “may be a bit higher than” 45 000oz to 46 000 oz in two years’ time, he said. The company has the capacity to lift production to 70 000 ounces at its mill, if it can feed it with ore at the current grades it is mining.