It is reported that New Dawn Mining, the Australian and Toronto listed miner seeks to review the recent gazette indigenization regulations for the mining sector in Zimbabwe and ensure it complies with the its subsidies based in the Southern African nation.
The Australian miner owns Casmyn Mining Zimbabwe Private Limited, Falcon Gold Zimbabwe Limited and Olympus Mines Limited which are presently non indigenous companies in respect of the country's indigenization law recently revised and enacted by the Robert Mugabe Morgan Tsvangirai led coalition government.
According to reports, the New Dawn however has filed for their indigenization compliance proposals with the authorities chiefly the Minister of Youth Development, Indigenization and Economic Empowerment in the earlier designated timeframe as required under the new law.
New Dawn is reviewing these new regulations in order to understand their potential impact on the company's Zimbabwe-focused mining operations and business plans and will report to shareholders as more information becomes available.
Under the law, the minimum requirements gazetted on March 25th 2011 stipulate that each non indigenous mining company must submit an indigenization plan within 45 days. Thereafter it should dispose of 51% less any percentage previously indigenized company to qualified indigenous Zimbabwean companies or investors of its shares to a designated entity within six months thereafter which may in certain circumstances, be extended by a further period of no more than three months.
New Dawn has however cautioned shareholders adding that actual outcomes could differ materially from those currently anticipated in terms of the newly gazetted regulations. The value of the shares to be transferred to a designated entity will be calculated on the basis of a valuation agreed by the indigenization Ministry and the non indigenous mining company and will take into account Zimbabwe's sovereign ownership of the minerals exploited or proposed to be exploited by the non indigenous mining company.
The latest requirements are however not expected to affect mining companies that have already complied with the regulations as stipulated in the Economic Empowerment Regulations of 2010. The Indigenization and Economic Empowerment Act was signed into law on March 9, 2008, and the related Regulations were gazetted as Statutory Instrument 21 of 2010 issued on January 29th 2010.
According to statistics from the country’s Reserve Bank, from 2010, the mining sector has experienced a major upturn, mainly in respect of the gold and platinum sub sectors. Gold production last year grew by 61%. New Dawn recorded its highest quarterly consolidated gold sales and production in the quarter ended December 31st 2010 with figures showing that the company recorded 62.7% and 48.4% increases in gold sales and production respectively.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
