Zimbabwe will pay for indigenisation

[miningmx.com] – MARKET prices would be paid for shares handed over
by foreign investors in Zimbabwe’s coal sector, according to a Chamber of Mines of
Zimbabwe official.

“Indigenisation laws in Zimbabwe say that the Zimbabwe government will not be the
shareholder, but there will be designated agents,’ said Davy Matyanga, a mineral
economist and technical advisor to Zimbabwe’s chamber of mines. “The transfer of
those shares would be at market value.’ .

Zimbabwe last year gazetted legislation providing for the transfer of foreign-owned
assets to Zimbabwean companies. The gazette notice failed to make clear at the
time, however, whether a consideration for the shareholdings handed over by foreign
investors would be paid, or whether expropriation of assets was on the cards.

In the case of Impala Platinum, which has an 87% stake in Zimplats, negotiations are
to be called to negotiate the value of the shares in Zimplats it has agreed, on an in-
principle basis, to sell to the Zimbabwean government’s indigenisation board.

Matyanga’s comments, delivered at a coal investment conference convened by the
Fossil Fuel Foundation in Johannesburg, were met with guffaws of disbelief from the
audience. However, Matyanga added: “If that happens or not, we don’t know, but that
is the law.’

Themba Hawadi, a director the Zimbabwe Geological Survey who was also attending
the conference, said he was confident there was sufficient capital in the country’s
private sector to pay for such shareholdings. “The indigenisation agreements are very
open-ended. Zimbabwean companies can enter the agreement at any time [of the
development of the asset],’ he said.

Matyanga said that 19 special grants had been awarded to foreign investors for coal
exploration in Zimbabwe, and a further three for coal methane exploration. He added,
however, that: “Zimbabwe’s coal-bearing areas require significant investment before
additional coal is realised.’

John Holloway, who consults to the Zimbabwe coal mining industry, said there were
plans to rehabilitate the country’s rail infrastructure but declined to provide details.

Said Matyanga: “Most of the coal fields under investigation are not serviced by rail.’
The distance between some potential coal fields and export markets was as much as
2,000 km, he said.