Blanket Mine taking legal advise after Kasukuwere letter

BLANKET gold mine's says it is taking legal advice after Empowerment Minister Saviour Kasukuwere recommended the cancellation of its operating licence.

In a statement issued on Friday, Caledonia said it had received a copy of a letter Kasukuwere wrote to his mining counterpart, Obert Mpofu requesting that the firm be barred from operating in the country.

"Caledonia has received a copy of a letter sent from the Minister for Indigenisation to the Minister of Mines, in which he requests that the Minister of Mines cancels Blanket's operating licence on the grounds that Caledonia's (indigenization) proposal does not meet the legislated indigenisation requirements," the statement read.

The company warned that Kasukuwere would be exceeding his "legal powers" if he were to order the cancellation of its Blanket Mine licence.

"Caledonia believes the Minister for Indigenisation has exceeded his legal powers both in terms of his assessment of Caledonia's proposal and his request to the Minister of Mines," the company said.

"Caledonia is seeking urgent clarification from the relevant ministers, and is also consulting with its legal advisers regarding appropriate legal action."

Letters signed by Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere gave the companies two weeks to comply or risk losing their licences.

Some of the letters were dated July 28 and this week ministry officials said they were still awaiting responses from the affected companies.

The affected companies were re-quired by law under the General Notice 114/2011 to submit indigenisation plans detailing how they inte-nd to meet 51 percent direct equity participation by locals within five years.

If the companies fail to rectify their non-compliance, the minister is empowered under the Indigenisation Act to institute proceedings to cancel their licences.

In the case of mining firms, this will be done through the Ministry of Mines and Mining Development while the Reserve Bank is responsible for licensing financial institutions.

An official in the ministry's legal division said if the firms fail to submit compliant indigenisation plans, moves would be taken to cancel their licences and the State would acquire them. Most of the affected companies refused to comment on their status, saying they were communicating directly with officials from the responsible ministry.

Minister Kasukuwere recently told a Confederation of Zimbabwe Industries congress that 700 foreign owned companies had submitted their Indigenisation and Empowerment proposals to the Government.

He said of these, 175 were mining companies which had previously proposed that they were only prepared to sell 26 percent direct equity to locals, while the balance adding to 51 percent would be met through social credits.

This was, however, thrown away when Minister Kasukuwere said credits could not be used to meet indigenisation thresholds.

Instead, Government wants workers and communities where these companies operate to get direct equity.

A certain portion of the equity could be held in trust under a sovereign wealth fund to benefit future generations.

Full list of the companies and deadlines:

Affected companies                        Deadline

Standard Chartered Bank                   14 days
Murowa Diamonds (Pvt) Ltd               14 days
Pan American Mining (Pvt) Ltd           14 days
Zimplats                                              14 days
Blanket Mine                                        7 days
Barclays Bank Zimbabwe Ltd             14 days
Mimosa Holdings                                14 days
Duration Gold Mine                            14 days
British American Tobacco                    7 days
Nestle                                                 14 days
Cargil Zimbabwe (Pvt) Ltd                  14 days