Caledonia Mining makes further concessions in indigenisation drive

Canadian-based mining firm, Caledonia Mining, which operates Blanket Mine in Zimbabwe, has signed two agreements in respect of the transfer of a 20 percent stake to indigenous Zimbabweans, The Zimbabwean has learnt.

An agreement has been signed for the sale of 10 percent of Blanket for a consideration of US$ 7.339 million to The Blanket Mine Employee Trust, which has been established for the benefit of employees.

In the other agreement, Blanket donated 10 percent of its shares to the Gwanda Community Share Trust.

Blanket will make a non-refundable donation of US$1 million to this trust. These two agreements are in addition to the agreement for the sale of 15 percent ownership of Blanket to a consortium of indigenous Zimbabweans for a consideration of US$11 million, which the company announced earlier this month.

Caledonia has submitted an agreement regarding the remaining indigenisation transaction, which entails the sale of a 16 percent interest to the National Indigenisation and Economic Empowerment Fund.

“Completion of these sale agreements is subject to several conditions, precedent which include certain approvals from the Reserve Bank of Zimbabwe and Caledonia receiving confirmation from the Government of Zimbabwe that full implementation of the terms of the MoU constitutes compliance by Blanket and Caledonia with the requirements of the Indigenisation Act,” Caledonia stated in an update.

Caledonia is one of many foreign mining companies the government has ordered to cede a major stake to indigenous Zimbabweans.

Critics warn such calls are scaring away investors from an industry that is in need of financial injection following years of economic turmoil.

Post published in: Mining

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