A file photo of gold miners as they shovel ore for panning on March 20, 2008 on the outskirts of Bulawayo, Zimbabwe.John Moore/Getty Images
Caledonia Mining Corporation says it has resolved a dispute with the Zimbabwean government over the future ownership of the company's Blanket gold mine in the southern African country.
Under the settlement announced Tuesday, Caledonia will resubmit a new plan to sell control of the mine to black Zimbabwean owners under a national law that went into effect last year.
As well, the government will suspend plans to cancel the operating licence for the mine.
The company and government met Monday and "agreed on a process that will result in the production of a revised Indigenization Implementation Plan for Blanket Mine that is compliant with the Indigenization and Economic Empowerment Act," said a joint statement released before North American stock markets opened Tuesday.
"The plan will take into account the independently verified intrinsic value of the mineral resources, plant and equipment at the mine," the statement said.
A new Zimbabwean law that forces foreign and local companies to sell a majority stake in their businesses to black Zimbabweans came into effect last year and required Caledonia to submit a so-called indigenization plan with the government.
Caledonia said last week it presented such a plan, but the country's minister responsible for the policy has asked the mines minister to revoke Blanket's operating licence "on the grounds that Caledonia's proposal does not meet the legislated indigenization requirements."
Under the Zimbabwean law, companies worth more than $500,000 (U.S.) run by non-black Zimbabweans have five years to sell a 51 per cent, upon the threat of jail sentences.
Blanket's operations continued normally while the company dealt with the dispute.
Caledonia is an African-focused miner with the operating Blanket gold mine in Zimbabwe, two platinum-nickel exploration projects in South Africa and a cobalt-copper exploration project in Zambia.
It also has a portfolio of exploration prospects in South Africa, Zimbabwe and Zambia .