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(NEWZIMBABWE) Minister threatens to cancel Zimplats licence

Minister threatens to cancel Zimplats licence
06/09/2011 00:00:00
by Nelson Banya I Reuters

ZIMBABWE said on Tuesday it could prosecute or cancel the mining licence of Zimplats, the local unit of Impala Platinum , for failing to agree to transfer majority ownership to local blacks, piling pressure on the firm to strike a deal.

However, Indigenisation and Economic Empowerment Minister Saviour Kasukuwere, who is leading the drive to increase Zimbabweans' control of the economy, said Harare had reached an agreement with Rio Tinto's Murowa mine and a deal was "imminent" for Aquarius' Mimosa mine.

The deals with Rio and Acquarius put the squeeze on Zimplats' parent, the world's number two platinum producer, which risks losing its concessions to others, especially the Chinese, who are favoured by President Robert Mugabe.

"Zimplats continues to defy the laws of this land, continues to abuse the process," Kasukuwere told reporters.

"We would like Zimplats to continue mining but if they continue to disregard the laws of the country we are left with no option but to invoke the provisions of the law. Zimplats will have to live with the consequences of their actions."

Kasukuwere, from Mugabe's Zanu PF party, spoke a few hours after the veteran leader told members of parliament he expected full co-operation of foreign firms with the empowerment plan.

Kasukuwere last month gave a 14-day ultimatum to mining companies, including Zimplats, Mimosa and Murowa, to come up with plans complying with the law requiring them to surrender majority stakes to black investors.

Under the Indigenisation and Economic Empowerment Act, companies failing to comply could lose their licences or face prosecution.

On Tuesday, Kasukuwere said 45 mining companies had their local ownership plans approved or were working towards full compliance, while 51 firms had ignored the two-week deadline.

Zimplats contributes about 10 percent of Implats' output and Zimbabwe holds the second-largest reserves of platinum after South Africa.

Kasukuwere did not give details of the agreement with Rio's Murowa diamond unit and would not comment on the response of Anglo American Platinum (Amplats), which runs the Unki mine.

Implats CEO David Brown said last month his company wanted to retain full control of Zimplats, adding Zimbabwe's equity policy "does not work".

Implats may not easily abandon its Zimbabwe operations and has announced a US$500 million expansion project there, which would bring its total investment close to $1 billion, the single largest investment in the politically troubled nation.

Mining is the anchor of Zimbabwe's economy, which is recovering from a decade-long recession, but analysts say Mugabe's policies are holding back the investment needed for faster growth.

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

posted by MrK @ 2:16 PM