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(NEWZIMBABWE) Govt won’t pay for mining shares: Kasukuwere

COMMENT - Excellent. Let them get paid for 'their' shares with with profits from their mines. That is the people's ore, they should be glad to keep any profit at all. In a perfect scenario, these mining companies would only be management companies and all profits would go to the state. In fact there is no reason why parastatals couldn't run these mines. Let the people keep all the money.

Govt won’t pay for mining shares: Kasukuwere
by Business Reporter
17/04/2011 00:00:00

IN remarks that may rattle the country’s mining sector further, Indigenisation and Empowerment minister, Saviour Kasukuwere has hinted that the government may consider the value of minerals to be equal to 51 percent of the value of companies and so pay them nothing.

Under the country’s indigenisation legislation, foreign-owned companies must give up at least 51 percent of their shareholding to locals as part of measures to economically empower the country’s previously marginalized black majority.

But investors are concerned that neither the government nor any of the intended beneficiaries can raise the cash needed to take up the equity which some analysts have estimated at more than US$1 billion.

Speaking in an interview after addressing mining companies and others at a closed conference organised by the SA Institute of International Affairs in Johannesburg Kasukuwere said it did not make sense to make Zimbabweans pay for their minerals.

“Why should I pay for minerals that belong to us? You can’t value on the basis of an asset that is not yours. Then I have to tax the people of Zimbabwe to pay for their resources,” Kasukuwere said.

Asked if this meant miners risked getting nothing for their shares, Kasukuwere said: “That’s a commercial decision, isn’t it? I mean if it makes sense that you’re going to be exploiting these resources worth so much, if it makes sense, then that is how we must proceed.”

Prodded further on whether the policy would be implemented along the lines of the country’s land reforms, Kasukuwere ominously remarked: “Exactly. It’s the same...”

Zimbabwe has given miners until May 9, 2011 to submit plans for complying with the indigenisation law and – if approved by the government – six months to complete the divestiture of at least 51 percent of their shareholding.

The Chamber of Mines has already warned that the legislation risked slowing growth in the sector while critics say the policy will scare-away much-needed investment.

But Kasukuwere said there was no need for panic.

“I think it is always better that investors are at ease in jurisdictions where they are working and that there is fair benefit that also accrues to the people of the country,” he said.

He also dismissed concerns that ordinary Zimbabweans would ne benefit from the measures with the shares going to politically-connected people.

“We’ve basically warehoused the shareholding on behalf of the majority of Zimbabweans so that we can allow the majority to participate in the fund. It’s a board that spearheads empowerment processes and programmes. Secondly, we are setting up the Sovereign Wealth Fund to store value for generations to come,” he said.

“Thirdly, we have a partnership that can be entered into with the Zimbabwe Minerals Development Corporation. And to some extent workers and management as well as communities will be considered.”

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

posted by MrK @ 2:31 AM