(NEWZIMBABWE) Chamber proposes 10pc stake for locals

Thursday, February 11, 2010

(NEWZIMBABWE) Chamber proposes 10pc stake for locals

Chamber proposes 10pc stake for locals
by Business Reporter
11/02/2010 00:00:00

ZIMBABWE’S Chamber of Mines has made an eleventh hour proposal for the reduction of the government-fixed company shareholding threshold for indigenous Zimbabweans from 51 percent to 10 percent.

Under regulations published on Tuesday, and in line with a law passed in 2008, Zimbabwe will from March 1 require companies to maintain a 51 percent ownership by locals.

Prime Minister Morgan Tsvangirai has moved to allay investor fears by calling the regulations “null and void”, but Youth Development and Empowerment Minister Saviour Kasukuwere told parliament on Wednesday there would be no retreat.

The Chamber of Mines president Victor Gapare claimed on Thursday that the government had in principle agreed to its proposals.

"We have given the government our proposals that equity (should be) a minimum of 10%, then empowerment credits will make up to 15% and this will cover local procurement," Gapare said.

"One of the concessions the government has given is that if a company lists on the local stock exchange, that will be considered as local empowerment mainly because most of those shares will be bought by local pension funds.”

Mining group Rio Tinto which owns a large stake in diamond producer Murowa Diamonds has already raised concern over the impact of the law on its diamond mining operations.

Other foreign investors in the banking sector, agriculture and mining are also reportedly apprehensive about the new reforms which President Robert Mugabe has backed.

Labels: CHAMBER OF MINES, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), NEOLIBERALISM