Uncertainty worries mine

By Daniel Chigundu

President Robert Mugabe

RENEWED confusion over the manner in which the Indigenisation policy is going to be implemented by the new government is causing untold headaches for mining giant New Dawn Mining Corporation, the company has indicated in its quarterly results ended June 2013.

New Dawn’s fear emanate from statements made during the just concluded harmonised polls where Zanu PF has indicated that there will be no monetary compensation for shares acquired by locals in foreign owned mining firms.

Zanu PF through its election manifesto has made it abundantly clear that it will fully indigenise the whole economy and President Mugabe has made follow-up statements that it was not mere election talk but reality.

Although there is no official communication that has been received by mining companies concerning this new arrangement New Dawn says in the wake of such developments there is no assurance that it can successfully comply.  

“Recent statements to the media by leading Zimbabwe politicians subsequent to the July 31, 2013 national elections in Zimbabwe indicate an evolving indigenisation policy that now appears to be focusing on seizing 51percent controlling interests in foreign-owned mines without monetary compensation, with the payment for such seizures to be deemed to be the value of the minerals in the ground.

“As there still continues to be substantial uncertainty surrounding the implementation of indigenisation policy in Zimbabwe, there can be no assurances that the Company will be successful in its efforts to comply with the indigenisation laws and regulations under commercially viable terms and conditions, or at all,” said New Dawn.

Indigenisation policy was one of the major concerns that widened the rift between political parties that formed the inclusive government with others claiming that it was anti-investor and describing it also as a self-enriching project.

The financial sector is also among the other various sectors that have been earmarked for compulsory indigenisation as soon as the new government takes office.

New Dawn said it is currently unable to predict the effect of a failure to conclude or implement a Plan of Indigenisation under terms acceptable to all stakeholders and regulatory authorities, but said such a failure could include the termination of the Company's mining licenses in Zimbabwe and the loss of ownership or control of the Company's mines or subsidiaries in Zimbabwe without monetary compensation.