Maravi

(NEWZIMBABWE) Mining firms offer 15 percent for empowerment

Mining firms offer 15 percent for empowerment
by Gilbert Nyambabvu
19/05/2010 00:00:00

THE Chamber of Mines set itself on a collision course with the government after proposing that its members give up only 15 percent of their equity under the country’s contested empowerment regulations.

The government has insisted that foreign-owned companies should localise ownership of no less that 51 percent of their equity and warned that firms that fail to comply with the regulations could lose their operating permits.

However the Chamber of Mines which has been leading consultations with authorities on behalf of the mining sector announced on Wednesday its members were offering 15 percent equity.

Mining companies want the 36 percent balance to be made up in the form of infrastructural investment and social spend.

Chamber president Victor Gapare told a news conference in Harare that government should recognise that most mining companies built schools and roads in the areas where they operate, benefiting nearby communities.

"The position which we put together says a minimum of 15 percent equity. The rest to make up 51 percent will be in the form of social responsibility programmes.

"From a broad-based empowerment point of view, you have to look at things like schools, hospitals, roads and all the developments which take place around mining communities, and in our minds that's true empowerment,” Gapare said.

The Chamber of Mines boss warned that the regulations we likely to undermine the sector’s recovery as companies were already struggling to secure capital due to perceived country risk.

"The mining companies are finding it very hard to attract capital. What we hope is that as the perceived country risk of Zimbabwe comes down, companies will be able to attract capital," he said.

Under the indigenisation regulations which that took effect at the beginning of March foreign firms valued at more than US$500000 were given 45 days to report their plans ceding 51 percent of their shares to locals.

The deadline has since been extended.

Critics say the regulations could scare away investors from an economy battling to recover from years of decline.

However government insists there is no going back on the programme with President Robert Mugabe describing the maximum 49 percent equity foreign investors can keep as a “hell a lot of equity”.

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

posted by MrK @ 6:23 PM