News

September 10, 2008

Caledonia Struggles On At Blanket, But New Money Is Rightly Earmarked For Nama In Zambia

By Alastair Ford

It’s difficult to know what to say or do if you’re operating a mine in Zimbabwe. On the one hand there’s the wish to reassure investors that the value destruction that has become a feature of that country’s economy as a whole, is at least tempered on the specific mine in question. But then again, any reassuring noise on that score, as to production or operational effectiveness, risks raising the avaricious gaze of the ruling Zanu PF regime. In the worst of all possible worlds, African Consolidated Resources actually made quite a decent diamond discovery in Zimbabwe not so long ago. It’s now widely believed that President Mugabe will expropriate the diamonds in order to trade them for oil with old pals in Equatorial Guinea. So a company like Caledonia Mining, which at the Blanket Mine, operates Zimababwe’s second largest gold project, has to tread a very careful path.

And it wasn’t particularly surprising when a request from Minesite’s Man in Zimbabwe to visit Blanket over the summer was politely rebuffed. Minesite’s man went anyway, exceeding his brief by some margin, and duly reported back on an operation creaking under the pressures of inflation and a lack of skills. He also noted some measure of progress at mine development, particularly on a new shaft, and added that, although investment is clearly needed if Blanket is to reach its full potential, at...