Zim consults Oxfam on mine indigenisation

Zim consults Oxfam on mine indigenisation
Published: 31 August 2017
GOVERNMENT has engaged Oxfam to support the National Indigenisation and Economic Empowerment Board (NIEEB) in renegotiating its indigenisation agreement with Blanket Mine.

Blanket Mine, which is owned by Canadian company, Caledonia, was the first company to comply with Zimbabwe's Indigenisation and Economic Empowerment Act in 2012 after it sold 51 percent of its equity to indigenous Zimbabweans.

These were represented by National Indigenisation and Economic Empowerment Fund (NIEEF) and the Gwanda Community Share Ownership Trust.

Oxfam is an international confederation of charitable organisations focused on the alleviation of global poverty.

NIEEB has formally requested Oxfam to strengthen its capacity to analyse and negotiate, anew, the Blanket Mine indigenisation contract to enhance its ability to get a better deal for indigenous Zimbabweans.

"Following Oxfam's continued engagement with the Gwanda community and NIEEB, government through NIEEB has resolved to renegotiate the Blanket Mine indigenisation agreement to ensure benefits accrue directly to indigenous Zimbabweans," Oxfam said in a statement.

Oxfam and NIEEB are currently in the process of negotiating a memorandum of understanding (MOU) to facilitate the requested action.

"As an institution with the statutory mandate to advise the Government of Zimbabwe on indigenisation and economic empowerment strategies that benefit Zimbabweans, the indigenisation board has also requested Oxfam to continue researching around extractives in an effort to benefit more from this kind of approach to development work," Oxfam said.

Oxfam said that the request by government demonstrated the importance of investing in evidence-based advocacy.

Oxfam did a comprehensive cash flow economic analysis of Blanket Mine in 2015.

Oxfam's research focused specifically on the vendor loans upon which designated entities secured indigenous shareholding.

Oxfam uncovered that facilitation loans provided for in the Blanket Mine Indigenisation Agreement are not guaranteeing any economic benefit to the people and Government of Zimbabwe under low gold prices.

"When successfully executed, this action by Oxfam will be groundbreaking and will profile Oxfam's expertise in extractives, showing proof that influencing does not always result in quick achievements, as it requires building trust and developing a shared vision and understanding amongst stakeholders," Oxfam said.

Caledonia acquired the Blanket Mine from Kinross Gold Corporation in 2006.

Blanket Mine is located in the south-west of Zimbabwe approximately 15 kilometres west of Gwanda.

According to a statement on Caledonia's website, the Canadian firm announced on February 20, 2012 that it had signed an MOU with the Minister of Youth Development, Indigenisation and Empowerment pursuant to which 51 percent of Blanket would be sold for a paid transactional value of US$30,09 million.

The various transactions were implemented with effect from September 5, 2012.

Sixteen percent was sold to the National Indigenisation and Economic Empowerment Fund, 10 percent was sold to a Management and Employee Trust, 15 percent was sold to indigenous Zimbabweans and 10 percent was donated to the Gwanda Community Share Ownership Trust.

Blanket also made a non-refundable donation of $1 million to the Trust as soon as it was established and paid advance dividends of $4 million before the end of April 2013.

The Trust will receive no further dividends from Blanket until the advance dividends have been repaid by future dividends arising on the Blanket shares that are owned by the Trust.

Caledonia facilitated the vendor funding of these transactions.

Indigenous Zimbabweans who have purchased their interest in Blanket will repay their outstanding facilitation loan by sacrificing 80 percent of their future entitlement to Blanket dividends.

Outstanding balances on the facilitation loans attracts interest at Libor plus 10 percent.

Libor is the interest rate at which banks offer to lend funds (wholesale money) to one another in the international interbank market.

Caledonia has a Certificate of Compliance which confirms that Blanket is fully compliant with the Indigenisation and Economic Empowerment Act.
- fingaz
Tags: Oxfam,


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