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Metallon Gold risks losing licence
02/12/2012 00:00:00
by Business Reporter
 
Zimbabwe mines at risk ... Mzi Khumalo
 
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ZIMBABWE’S  biggest gold producer, Metallon Gold, risks losing its operating permit after failing to comply with the country’s indigenisation programme, a Cabinet minister has warned.

Empowerment Minister Saviour Kasukuwere said Metallon Gold, owned by South African businessman Mzi Khumalo, was resisting pressure to set up community share ownership schemes at its mines around the country.

Kasukuwere said the company, along with John Mack Gold Mine and Canada-based Vumbachigwe Mines face punitive action which could include the revocation of their licences.

"We have always been very worried about Metallon Gold. They are the biggest gold mining company in the country, but do not want to comply," Kasukuwere told the Sunday Mail.

"We have now written a final warning to the three mining companies, telling them that if they do not comply they will lose their licences."

Zimbabwe’s economic empowerment legislation require foreign firms to transfer control and ownership of at least 51 percent of their operations to locals including setting up share ownership schemes for communities where they operate.

Last month, South African media reported that Metallon planned to hand over five percent equity in the group to an employee ownership scheme as part of its indigenisation programme.

But Kasukuwere said the company’s compliance proposals did not meet the government’s requirements.

"We have always been very worried about Metallon Gold. They are the biggest gold mining company in the country, but do not want to comply," he said.

"We have now written a final warning to the three mining companies, telling them that if they do not comply they will lose their licences."

Valued at more than US$320 million and employing some 3,600 workers, Metallon Gold owns five mines in Zimbabwe, including Arcturus mine, Shamva mine, How mine, Redwing mine and Mazowe mine.

Kasukuwere also warned that Vumbachigwe Mines, which has operations in Mashonaland Central province, could also be kicked out of the country.

"We consulted them numerous times, asking them to give us their proposals for compliance. We even approached and asked them to contribute to the Mashonaland Central Community Share Ownership Trust,” he said.

“They, however, refused, yet they have the biggest gold mines in the province. Our patience has run out; we will not be deterred in implementing the law when dealing with them."



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"I held a discussion with Mines Minister (Obert) Mpofu and (have since written to him) a proposal to revoke the mining licence of Vumbachigwe Mine. We have already said there are no sacred cows when it comes to the laws of the land."

"Those (foreign companies) who are no longer interested in doing business in this country must leave. We have already said 'lets share the national cake and some are refusing.'"


 
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