First casualty of Zimbabwe mine grab

Saviour Kasukuwere, Zimbabwe’s youth development, indigenisation and empowerment minister, has cancelled the operating licence of the country’s leading gold mine, as the battle for control of foreign-owned mining companies intensifies.

The Blanket Mine, wholly owned by Canadian firm Caledonia Mining Corporation, is the first casualty of Zimbabwe’s bid to grab shares in the lucrative mining sector.

Foreign-owned mining companies have been given a deadline of September 30 by which to submit plans to Kasukuwere’s ministry showing how they will cede a 51% shareholding to indigenous Zimbabweans, as prescribed by the Indigenisation and Empowerment Act.

A letter written by Kasukuwere to Mines and Mining Development Minister Obert Mpofu, seen by the Mail & Guardian, informed the Blanket Mine that the ministry had decided to cancel the operating licence because of the mines “failure to come up with acceptable indigenisation proposals”.

In turn, the mine, which recorded a 300% increase in gold production in its second quarter, has threatened to take legal action against Kasukuwere, arguing that he has “exceeded his legal powers”.

It is understood that the firm is taking legal advice on the constitutionality of the empowerment laws and may take the lead in challenging them.

Kasukuwere said this week that “the mining industry is regrouping, yet that will not deter us one bit.

“The fight will overshadow the land-reform programme, as this one is much more sophisticated and is about serious wealth.”

At an indigenisation indaba last month, Kasukuwere rejected the Zimbabwe Chamber of Mines’s proposal of a 26% takeover of mines and vowed to “kick out” non-compliant firms.

Economic analysts have warned of investor flight from the country caused by the over-hasty implementation of the empowerment laws, which have also split Zanu-PF between party hardliners and moderates.

There is growing political speculation that a cabal of President Robert Mugabe’s close allies is behind the latest onslaught on the mines.

Alex Mhembere, chief executive of the Impala Platinum-owned Zimplats, said: “There is a big appetite for a stake in Zimplats by people in business and political office.”

Kasukuwere has now issued a “14-day ultimatum” to mines and foreign banks.

His ministry indicated this week that it had rejected the empowerment proposals of 39 foreign mining companies and had issued letters warning them to provide “acceptable” proposals by the expiry of the two-week deadline.

Among the mining companies at risk of losing their operating licences are Zimplats, Anglo Platinum and Aquarius Platinum.

British-owned banks Standard Chartered and Barclays have also been targeted, as has Standard Bank’s JSE-listed Zimbabwean subsidiary, Stanbic.

As fresh uncertainty fuelled by the empowerment laws gripped Zimbabwe’s fragile banking sector, long queues of panic-stricken customers of Standard Chartered and Barclays banks were seen making withdrawals over the weekend.

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