(NEWZIMBABWE) Indigenisation - miners given six months to comply

Monday, March 28, 2011

(NEWZIMBABWE) Indigenisation - miners given six months to comply

Indigenisation: miners given six months to comply
by Gilbert Nyambabvu
28/03/2011 00:00:00

THE government has given foreign mining firms operating in the country 45 days to submit plans for complying with the country’s indigenisation requirements and, thereafter, six months to implement them.

A notice setting out the guidelines was published by the Indigenisation and Economic Empowerment Ministry last Friday.

Gazetted in 2007 with supporting regulations issued in February 2010, Zimbabwe’s empowerment laws require all foreign-owned companies with a minimum issued share capital of US$500 000 to localise ownership of at least 51 percent of such shareholding.

The statutory instrument gazetted on Friday explained the application of the regulations to the country’s lucrative mining industry.

The notice stated that disposal of the indigenisation interests must be to defined “designated entities”, which include the National Indigenisation and Economic Empowerment Fund, the Zimbabwe Mining Development Corporation or any company incorporated by that entity, a statutory sovereign wealth fund that may yet be created, or an employee share ownership scheme or trust.

“The value of the shares or other interests required to be disposed of to a designated entity … shall be calculated on a basis of valuation agreed to between the Minister and the non-indigenous mining business concerned, which shall take into account the State’s sovereign ownership of the mineral or minerals exploited or proposed to be exploited by the non-indigenous mining business concerned,” the notice added.

Companies were given 45 days from the date of publication of the Notice to outline their compliance plans and another six months to implement them if approved by the Empowerment ministry.

The industry had offered just under 30 percent of shareholding with the balance to make up 51 percent coming from so-called empowerment credits that took into account social investments such as the development of infrastructure in localities where the operate but this was rejected by the government.

Already Aquarius Platinum, which has a 50 percent interest in Mimosa platinum mine which makes up about 19 percent of its overall production, has announced that consultations were underway regarding compliance with the regulations.

“Mimosa Mining Company is engaged in discussions with the relevant authorities in order to establish a position that will be compliant with the Act and beneficial to stakeholders,” the company said in a statement.

The company’s shares took a knock, easing 6.87 per cent in Australia, on the back of concerns about the heightened risk of operating in Zimbabwe. Zimplats, the country’s biggest platinum miner, was also affected with its shares retreating 8.32 per cent in Mondays trading.

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