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(NEWZIMBABWE) Platinum shares tumble on indigenisation worries

Platinum shares tumble on indigenisation worries
by Business Reporter
28/03/2011 00:00:00

SHARES in platinum miners operating in Zimbabwe have been sold-off on the back of concerns over the country’s empowerment regulations.

Companies affected include Impala Platinum subsidiary, Zimplats which runs the country’s largest platinum mining operations and is implementing a US$500 million expansion programme.

Also affected was Aquarius Platinum which has a 50 percent interest in the Zvishavane-based Mimosa platinum mine which accounts for about 19 percent of the group’s overall production.

Aquarius was the worst performing stock on Australia’s S&P/ASX 100 index on Monday after saying it was striving to comply with the empowerment rules that will soon require 51 per cent of all foreign-owned businesses to be owned by indigenous Zimbabweans.

The company dropped 6.87 per cent, to $5.42, while shares in Zimplats Holding Ltd, which is reviewing the progress of a mine expansion in Zimbabwe, fell 8.32 per cent, to $13.00.

And an analyst said it was difficult to see how the new rule could be achieved "in such a way that it would realise good value for the company".

"No company is going to operate in a sphere where they can't control their own operations. There are real concerns for these operations,” he said. "It's not a good sign for platinum coming out of Zimbabwe."

However, President Robert Mugabe insisted at the weekend that there was no going back on the indigenisation programme adding those unhappy with the legislation were free to leave the country.

“This our country. If you have companies which would want to work in our mining sector, they are welcome to come and join us, but we must have our people as the major shareholders," the Zimbabwean leader said.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), PLATINUM, ZIMPLATS

posted by MrK @ 3:04 PM