[miningmx.com] — ZIMBABWE’S indigenisation legislation was not intended for the seizure of assets, or nationalisation, according to Tapiwa Mashakada, the country’s Minister for Economic Planning and Investment Promotion.
Addressing the Africa Down Under conference being held in Perth, Australia, on Thursday, Mashakada presented a version of the legislation that sounded very different to what various mining companies which operate in Zimbabwe report they were facing on the ground.
According to Mashakada, indigenisation – which stipulates 51% of any company in the country must be owned by Zimbabweans – had “some degree of flexibility’ and also “encouraged investors to find local partners to whom they would cede 51% of their projects”.
He conceded that large mining companies would not readily find such partners but added their projects “were not going to be nationalised or expropriated”.
Mashakada said investors would be given time to comply with the laws and that exceptions were being made because “you have to think outside the box”.
He cited the example of the Essar group which had just bought 54% of steel group Zisco, along with 80% of the iron ore reserves that were linked to the steel works.
These comments are at odds with statements issued by Zimbabwe’s Indigenisation and Empowerment Minister, Saviour Kasukuwere, and also with the official statements from companies dealing with Kasukuwere’s department.
On August 19 it was reported by Zimbabwe’s state controlled media that the government had given foreign mining firms a 14-day ultimatum to submit “acceptable plans’ on how they proposed to transfer a majority of their equity to local owners or risk losing permits.
Both Aquarius Platinum and Impala Platinum (Implats) subsequently reported that their indigenisation proposals had been rejected and that they remained in negotiations with the Zimbabwe government.
The attitude of Implats’ CEO David Brown was that a 51% indigenous stake was unrealistic and did not reflect the risk/reward ratio involved in the creation of a large mining operation, which required the investment of huge amounts of capital expenditure over an extended period.
Interviewed on August 25 when Implats released its annual results, Brown said he viewed the threats from the Zimbabwe government as “political rhetoric’ designed to pressurise his group.
“I have the impression that the Zimbabwe government does not want to retard investment in the country nor the growth of the country’s mining sector.”
Interviewed on the sidelines of the conference after his presentation, Mashakada said the comments by Kasukuwere “did not represent the position of the Zimbabwe cabinet”.
“The Zimbabwe cabinet has the final word and the cabinet has agreed to give investors a reasonable amount of time to work on their compliance plans,” he said.
“We do not intend to force indigenisation down investors’ throats.”
Asked to explain the anomaly between Kasukuwere’s comments and his own assessment of the situation Mashadaka replied: “Kasukuwere is an individual. That’s his style. Investors should approach my department if they have problems or queries.”
