Caledonia plays down Zimbabwe threat

[miningmx.com] — CALEDONIA Mining Corporation has played down threats that the Zimbabwe government could take over its gold operations in the mineral rich Southern African state, following reports attributed to the CEO that it was not keen to implement the country’s controversial indigenisation policy.

Caledonia said on Tuesday it had submitted a revised compliance plan in October and that it was still locked in negotiations with the government in a bid to strike a “mutually agreeable’ implementation plan. It’s initial compliance plan was rejected by the government two months earlier.

Caledonia owns and operates the Blanket gold mine in the south of Zimbabwe. There have been concerns that it could lose this property after the outspoken Savior Kasukuwere, Zimbabwe’s Indigenisation and Youth Minister, said the government could compensate the company and take over the mine if it was not committed to fulfilling the empowerment legislation.

“For those who do not accept our laws, we will pay for their investment and the rest will be for our people and we move on,’ Kasukuwere said on Monday.
Making reference to Caledonia, Kasukuwere said: “If you do not want to comply, we will take over, simple and straightforward.”

Caledonia CEO, Stephan Hyden reportedly said last month that the indigenisation law was a “political gimmick’ and “the political football of the moment’.

Mining sector executives had been spooked by Kasukuwere’s statements.

International investors have said the indigenisation law will drive away potential investments at a time when Zimbabwe’s economy has begun to show signs of revival, with a 9% growth projected for the economy this year.

However, just a day after Kasukuwere threatened Caledonia, the Toronto-listed gold mining concern said it was fully committed to negotiations with the Zimbabwe government over indigenisation.

“Caledonia and its chief executive officer, (Stephan) Hayden, categorically deny having made any statements to the effect that he and Caledonia are not wholly committed to the rapid implementation of indigenisation of the Blanket Mine,’ the company said.

Hyden “refuted’ allegations that he “scoffed at” the empowerment drive.

Kasukuwere has warned foreign companies to comply with the law while President Robert Mugabe, whose Zanu-PF party is spearheading the policy, said last weekend that “51% control (of foreign companies) must rest with our people’.

Kasukuwere also said on Monday that all foreign mining companies should have complied with the law by December 2012.

Gold miners such as Caledonia, New Dawn as well as Mwana Africa, which operates the Freda Rebecca gold mine, have recorded a general increase in output and revenue from Zimbabwe operations in the year to date period.