ONLY three foreign-owned mining houses — Metallon Gold Zimbabwe, New Dawn Mining’s Falgold, and Duration Gold — have not yet complied with the requirement they be 51% indigenously-owned, Youth Development, Indigenisation and Economic Empowerment minister Saviour Kasukuwere disclosed this week.
Report by Staff Writer
He told businessdigest the majority of firms in the mining sector had now complied with the country’s indigenisation and empowerment regulations as per General Notice 114 of 2011 or had put in plans to ensure they meet the 51% compliance requirement.
Metallon Gold is one of Zimbabwe’s largest gold producers which bought most of the former multinational corporation Lonhro’s mines. These include Mazowe’s Jumbo, Arcturus, Redwing, Shamva and Howe mines.
As part of its compliance plan, Metallon Gold is in the process of drawing up proposals for an employee share ownership scheme alloting 10% of its shareholding to the 3 714-strong workforce. Although the value of the shares will be determined through negotiations, the last valuation of the Metallon group, done by mining consultants SRK, put its value at US$323 million.
Sources say after sealing deals with employees, the community and the National Indigenisation and Economic Empowerment Fund, Metallon is also looking at partnering the Chinese to take up a stake. Chinese are attributed indigenous status.
Falgold’s plan for compliance is not yet clear as the parent company, New Dawn, is in the process of buying out minority interests either for cash or newly-issued New Dawn common shares.
The Zimbabwe Stock Exchange has granted approval for the termination of the listing of Falgold shares on the bourse, subject to the fulfilment of some pre-conditions.
The arrangement is conditional upon, and will not become effective until, among other things, the receipt of necessary regulatory approvals in Canada and Zimbabwe, such as acceptance by the Toronto Stock Exchange and exchange control approval by the Reserve Bank of Zimbabwe.
However, Duration Gold, owned by Clarity Capital and owners of the Vubachikwe Mines in Gwanda, refused to take part in the Gwanda Community Share Ownership Trust launched by President Robert Mugabe in May. Kasukuwere was reported to have said he had given recommendations to Mines minister Obert Mpofu for the cancellation of the company’s licence.
The Indigenisation minister also said there were still outstanding issues with Raintree Mining, which is the majority shareholder in RioZim in partnership with global equity fund, GEM Holdings. He emphasised that RioZim was indigenised while Raintree had not yet met the requirements.
Kasukuwere said his ministry was working with Brainworks Capital over the creation of the Harare Stock Exchange, which will trade in the shares of companies that have been indigenised. The exchange is targeting mining companies such as Zimplats, Blanket Mine and Metallon Gold Zimbabwe.