FALCON Gold (Falgold), the Zimbabwe Stock Exchange (ZSE)-listed gold miner, has suffered further knocks and fallen victim to the government’s land seizure policy, as its Kado
ma-based Venice Estate has been designated for compulsory acquisition despite investment protection agreements between Harare and Luxembourg.
Falcon Investments Holding Societe Anonyme (FIHSA) of Nordic Europe majority owns Falgold, respective owners and operators of Camperdown Tribute, Dalny, Golden Quarry and Venice mines. The holding FIHSA company is wholly incorporated in Luxembourg.
In a November 19 government announcement, Falgold’s 1 300-hectare Venice Estate, with a title deed 3125/91, was listed for mandatory take-over under President Robert Mugabe’s land distribution exercise — already claiming its Shurugwi mine farms and plantation estate.
Harare normally gives its intention of taking over targeted properties through Section 5 notices, which is part of a broad land take-over law crafted in the aftermath of violent occupations of minority-held land in 2000.
While Mines minister Amos Midzi professed ignorance about Falgold’s listed properties, company secretary Craig Smith said they were aware of Venice Estate’s expropriation plan, but they would “appropriately” contest it.
“We have seen the notice. I am sure that our directors will appeal against it,” Smith, who was speaking on behalf of absent managing director Andrew Beattie, said.
He would not elaborate on how they would carry the reclamation plan and when it would be instituted, but businessdigest strongly understands that the mining firm has lost considerable bullion resources since the land encompassed yet-to-be-developed claims.
It is also strongly understood that Falgold will take its Venice Estate fight to the Chamber of Mines which will universally look at other affected parties.
Observers this week said Harare’s move to wrest Falgold’s land further heightened uneasiness in the critical mining sector at a time it is reeling from various operational challenges and demands for mainly foreign-held mines to cede 50% of their shareholding to locals.
It also adds to the losses and woes besetting large corporates — both listed and non-quoted concerns — in Zimbabwe.
Said one analyst: “The government has to clarify if that piece of land (Falgold’s) it wants to get is owned under a mining lease or not because this has a serious bearing on the issue of security of tenure.”
“What also has to be clarified was the notice of acquiring the land done in consultation with Falcon Gold. Zimbabwe might end up having problems in attracting potential investors if we have a scenario which results in the Land Acquisition Act superseding every piece of legislation in the country,” he said, refreshing the Kondozi Farm debacle, which trampled on export processing zones laws.
Notwithstanding the land seizures, Falgold has had to temporarily close its Venice mine because it is unviable.
The mine, initially set to close for six months since March 2002, is yet to reopen.
Meanwhile, another ZSE-listed concern, Mashonaland Holdings Ltd (Mashold), was last week dealt a body blow when its Eyrecourt farm was placed under section 7 of the land seizure laws, which demand that owners defend — within five days — reasons for keeping their land.
Eyrecourt, in south east Harare and measuring 197 hectares, was earmarked for property development and according to company chief executive chief executive Justin Dowa, the forcible seizure was one of the many setbacks the property company has suffered in recent months.
“We monitor what happens to any of our assets…and we try to resolve any problem in an appropriate manner,” he said last Wednesday.
Mashold, managing properties worth $32 billion and formerly owned by Anglo American Corporation, relisted on the local bourse when new shareholders led by Intermarket bought into the group last year.
Its property portfolio includes the plush Intermarket Life Towers in central Harare and is worth in excess of $11,5 billion.