RioZim fights gold mine seizure

2013-02-03 16:49

Harare - Zimbabwe's RioZim Limited has gone to the High Court to fight off seizure of a gold mine by allies of President Robert Mugabe, who accuse it of flouting a black empowerment law, the company said on Friday.

RioZim said two lawmakers, including Tourism Minister Walter Mzembi from Mugabe's Zanu-PF party, took control of its Renco gold mine, 300km south of Harare, two weeks ago.

"Minister Mzembi arrived at the mine... He called a public meeting and announced that RioZim had not complied with the indigenisation obligations of the country and hence they were taking over Renco," RioZim said in a statement.

People not employed by the mine blockaded it, resulting in daily production losses of $150 000, said RioZim.

It said the minister had appointed a local member of parliament as general manager and directed all staff to work under him.

The MP was now using threats and intimidation to bar RioZim directors and management from the mine while denying them access to the company's gold bullion, the firm added.

Mzembi furiously denied RioZim's accusations, saying he only became involved with the mine when Renco workers lobbied him as their local MP to intervene in a pay dispute.

"That's political slander. I'm surprised by their statement, which seeks to politicise what is a dispute between them and their workers," he told Reuters.

"I have no interest in the mine's shareholders except to say they must comply with the laws of this country. I have never taken an ounce of gold from Renco, nor do I intend to, but my people are crying for justice."

Renco - formed in 2004 when Rio Tinto Plc sold off most of its Zimbabwe assets - produced 11 000 ounces of gold in the first half of 2012, when it resumed operations after shutting down at the height of Zimbabwe's hyperinflation crisis in 2008.

RioZim was saddled with $50m of debt and on the verge of collapse in 2012 but was saved when New York-based private equity fund Global Emerging Markets took a 25% stake.

Major mining firms in Zimbabwe, including leading platinum producers Anglo American Platinum and Impala Platinum , have been forced to surrender majority stakes to local investors under the Mugabe-led black empowerment drive.

Saviour Kasukuwere, the minister in charge of the process, was not available to comment on the RioZim seizure, but has been quoted in local media describing the move as "irrational".

"We want law and order in this country and we don't want indigenisation to be dragged into the mud," he was quoted as saying in private newspaper NewsDay.

  • lynn.syme.1 - 2013-02-03 17:03

    Serves Rio right for doing business in a country with such a disgusting human rights record. I hope they sink.

  • moriri.mosweu - 2013-02-03 17:12

    Is it Mugabe's high court? no chance...

  • lance.hurly - 2013-02-03 17:25

    Wow! Don't ever make the mistake of thinking this dude is stupid... The timing of this is such that it could be said to be a way of spurring on our local thugs to start taking some of our troubled mines back "for the people". Methinks comrade Bob's backers have designs on South African assets...

  • nicholas.graan - 2013-02-03 17:46

    If we can't have it, we will take it. "Indigenisation" laws are already adhered to in the form of taxes, whereby foreign owned businesses including mines pay billions of dollars to the governments of the countries where they mine. The problem is, this money is rarely used to deliver services and develop the host country. Institutions of learning are neglected and ignored instead of being improved. This money could assist in educating and upskilling local Zimbabweans so that one day they too can create their own wealth and get involved in foreign business operations. Instead these taxes are mismanaged, stolen and squirreled away in foreign bank accounts of the ZANU PF elite. Then in an attempted to appease the impatient masses, and make it look like they give a damn, they come up with these ridiculous laws enabling them to steal half of what other people have built up. This after over 30 years of independence.

      munyaradzi.nyamarebvu - 2013-02-04 07:12

      You have hit the nail on the head.

  • Strikeback - 2013-02-03 18:20

    Investing in Zimbabwe is bad news! The countries leaders have sucked their electorate dry, taken everything from the "settlers" and still can't survive without cooking the duck that lay the golden eggs. Makes one think about a South African member of parliament calling a mine CEO arrogant just the other day. Eish - how we going to protect that duck that lay the golden eggs?" Let's eat it - then nobody can steal it!

  • attila.biemuller - 2013-02-06 09:36

    Let them take it,they will spend billions of dollars to make millions of dollars.!

  • ZION - 2013-02-06 15:09

    next the diamond mines will see their backsides

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