Maravi

(NEWZIMBABWE) No social investment concessions: govt

COMMENT - Excellent. No weasling out of indigenisation or taxes.

No social investment concessions: govt
by Business Reporter
02/02/2011 00:00:00

IN a development likely to unnerve major investors such as Impala Platinum, the government has ruled out giving foreign investors so-called “empowerment credits” for social development projects under the country’s controversial indigenisation programme.

In a statement issued to state media, Indigenisation and Empowerment Minister Saviour Kasukuwere said government would force foreign companies to sell at least 51 percent of their shareholdings to locals.

Kasukuwere said locals must also have 100 percent control of all alluvial diamond mining activities adding the government would not be giving any credits for social initiatives.

“Work is at an advanced stage to finalize consultations on the mining sector with a view to publishing the gazette for the sector not later than the end of February 2011,” Kasukuwere said.

However, major investors such as Impala Platinum (Implats), which is carrying out a US$450 million expansion programme at its Zimplats mines, are likely to be concerned about Kasukuwere’s decision not to give any credits for social development activities.

Miners had hoped that the indigenisation threshold could be reduced from a minimum 51 percent if they invested in the building of roads, schools and other social programmes in the communities they operate.

Implats also struck an agreement with the government – years ago – where by the South Africa-based company gave-up part of its platinum claims in the country in return for the so-called empowerment credits under which they would not need to meet the 51 percent threshold.

Critics say the empowerment laws could hit investment in the country’s mining sector which is beginning to recover from a decade-long political and economic crisis.

The Chamber of Mines says the industry needs about $5 billion investment to get production back to pre-crisis levels.

Mining output, which grew by 47 percent in 2010, is set to grow by a further 44 percent this year, according to the Reserve Bank of Zimbabwe.

Zimbabwe has the world’s second largest platinum reserves, after South Africa while vast deposits of alluvial diamonds were found in Marange, in the eastern Manicaland province.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), SAVIOUR KASUKUWERE

posted by MrK @ 5:52 PM