RioZim fights gold mine seizure by Mugabe allies

Fri Feb 1, 2013 9:22am EST

* Tourism minister seizes gold mine, company says

* RioZim accused of breaking black empowerment law

* Minister says he only intervened in pay dispute

* Empowerment Minister criticises "irrational" takeover

By Nelson Banya

HARARE, Feb 1 (Reuters) - Zimbabwe's RioZim Limited has gone to the High Court to fight off seizure of a gold mine by allies of President Robert Mugabe, who accuse it of flouting a black empowerment law, the company said on Friday.

RioZim said two lawmakers, including tourism minister Walter Mzembi from Mugabe's ZANU-PF party, took control of its Renco gold mine, 300 km (200 miles) south of Harare, two weeks ago.

"Minister Mzembi arrived at the mine... He called a public meeting and announced that RioZim had not complied with the indigenisation obligations of the country and hence they were taking over Renco," RioZim said in a statement.

People not employed by the mine blockaded it, resulting in daily production losses of $150,000, said RioZim.

It said the minister had appointed a local member of parliament as general manager and directed all staff to work under him.

The MP was now using threats and intimidation to bar RioZim directors and management from the mine while denying them access to the company's gold bullion, the firm added.

Mzembi furiously denied RioZim's accusations, saying he only became involved with the mine when Renco workers lobbied him as their local MP to intervene in a pay dispute.

"That's political slander. I'm surprised by their statement, which seeks to politicise what is a dispute between them and their workers," he told Reuters.

"I have no interest in the mine's shareholders except to say they must comply with the laws of this country. I have never taken an ounce of gold from Renco, nor do I intend to, but my people are crying for justice."

Renco - formed in 2004 when Rio Tinto Plc sold off most of its Zimbabwe assets - produced 11,000 ounces of gold in the first half of 2012, when it resumed operations after shutting down at the height of Zimbabwe's hyperinflation crisis in 2008.

RioZim was saddled with $50 million of debt and on the verge of collapse in 2012 but was saved when New York-based private equity fund Global Emerging Markets took a 25 percent stake.

Major mining firms in Zimbabwe, including leading platinum producers Anglo American Platinum and Impala Platinum , have been forced to surrender majority stakes to local investors under the Mugabe-led black empowerment drive.

Saviour Kasukuwere, the minister in charge of the process, was not available to comment on the RioZim seizure, but has been quoted in local media describing the move as "irrational".

"We want law and order in this country and we don't want indigenisation to be dragged into the mud," he was quoted as saying in private newspaper NewsDay.