Harare – AIM-listed Caledonia Mining Corporation, a company that operates Zimbabwe’s Blanket Mine says it is looking forward to expand its operations in Zimbabwe despite the current economic challenges the country is battling through.
The life of Blanket Mine was recently expanded to a period of about 14 years and has a capacity to produce between 54,000 to 56,00 oz per year. Production is expected to plummet to about 80,000 oz/year once the Central Shaft due in 2021 is completed.
While giving an insight into the operating environment in Zimbabwe during a recent interview with Mining Review Africa, Caledonia CEO, Steve Curtis took note of the economic hurdles characterised by foreign currency shortages, but said the company is looking ahead to boosts its operations.
“None of us can pretend that the operating environment is easy, the economic situation in Zimbabwe is very challenging for us, for the country and its consequences of the fact that the economy is dollarised. The economy is not generating enough of its own foreign currency, so it is an economy that needs to grow,” he said.
“But the mere fact that we’re three or four years into a project which is heavily foreign currency reliant and we’re progressing and we’ve got to a stage where the shaft is 1200 meters deep and we have continued to produce gold at an outstanding level, it shows that you can do business in Zimbabwe, but it is tough and you’re very much reliant on your ability to generate funds because borrowing money for Zimbabwe is very difficult.”
Zimbabwe is rich with minerals part of which the Company looks forward to exploit.
“We have an opportunity because Zimbabwe is very rich with mineral resources and we look forward to building a bigger and healthier business in Zimbabwe,” said Curtis.
He also addressed the process in which Caledonia is currently seeking to increasing its stake in Blanket Mine following the amendments to the Indigenisation and Economic Empowerment Act by Government.
In 2012, Blanket Mine became the first fully indigenised Zimbabwean gold miner complying with the Indigenisation and Economic Empowerment Act, which stipulated that foreign investors should cede 51% of their shareholding to locals.
This saw Caledonia controlling 49 percent shareholding in Blanket while 16 percent shares were sold to the National Indigenisation and Economic Empowerment Board, 10 percent to Blanket’s mine management and employee trust and 15 percent to identified indigenous Zimbabweans.
“We’re busy buying back ownership and we have one transaction we have announced already whereby we 15% back from a group of local businessman which will take us up to 64%,” he said.
The Company is due to report its full-year results around March where the impact of the difficult operating environment in Zimbabwe is likely to make its presence felt.
Equity Axis News
