Zimbabwe mine to float in London in 2015

LONDON – A Zimbabwean gold miner run by a former political prisoner who served time with Nelson Mandela plans to list in London next year.

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Metallon, run by Mzi Khumalo is restructuring the mining group to get it in shape for a float on London’s main market in the second half of 2015. It is working with broker Canaccord Genuity and lawyers Norton Rose ahead of the float and will appoint a third firm in the new year.

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Khumalo, jailed at South Africa’s Robben Island during apartheid, has instigated the shake-up, which strengthening its board to meet with London stock market guidelines and changing its year end to December.

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Float plans: Mzi Khumalo, owner of Metallon plans to float the miner on the London stock exchange in 2015

Float plans: Mzi Khumalo, owner of Metallon plans to float the miner on the London stock exchange in 2015

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The company has had a difficult history since its creation in 2002 when Khumalo founded it from assets bought from Lonmin. Metallon considered floating in 2005, 2007 and then in 2010 but various issues, including Zimbabwe’s extremely fragile economic situation, led to the company remaining private. It was forced to shutter its mines in 2007 for two years when president Robert Mugabe’s central bank failed to pay for gold.

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But since then the economic outlook has improved, and the Harare and London-based group has been increasing its output.

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Metallon sells its gold to the Zimbabwean reserve bank, but the country, its leadership and its economy is still controversial. In October Khumalo admitted: ‘I came into Zimbabwe when nobody would touch his country. I took the risk.’

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Under Mugabe’s rule the country has an indigenisation policy, which led to the often violent seizing of white farmers’ land. Companies must be part-owned by local people or the government. Metallon has submitted its indigenisation proposals to the government and is awaiting approval.

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The price of gold has remained broadly stagnant this year at between ,150 and ,350 an ounce – well below the 2012-13 peak, which was more than ,600. Some analysts predict rising interest rates in 2015 will put further pressure on the price of gold with prices predicted to weaken to around ,000. But as Zimbabwean’s biggest gold miner, Metallon has been slashing costs to make its mines more efficient to cope with price fluctuations.

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