Maravi

Over 50 mines face axe

Over 50 mines face axe
Thursday, 08 September 2011 02:00
Golden Sibanda Business Reporter

More than 50 foreign-owned mining firms risk losing their licences after failing to submit acceptable indigenisation and empowerment plans as directed by Government.
In a statement, Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere said the 51 firms also risked prosecution.

Already, the minister has indicated that they have started the process of cancelling the operating licence for Zimplats after the company failed to comply with the law.
Up to 45 mining companies have either had their plans approved or have agreed on an implementation framework and will generate revised plans to achieve a 51 percent indigenous threshold.

"Companies that did not respond or have not complied with the indigenisation and economic empowerment legislation will be prosecuted or have their business operating licences cancelled," said the minister.

In terms of the Indigenisation and Empowerment Act enacted in 2008, foreign-owned firms are compelled to cede for value at least 51 percent equity to locals.
Leading the band of delinquent foreign-owned mining firms is the country's largest platinum miner Zimplats, which might be first to lose its licence.

The firm wanted Government to recognise its claim that it had localised 30 percent of its equity after releasing a block of mineral reserves it says were worth US$150 million. The State said it would rather pay for the reserves than award credits.

Although Zimplats maintains that discussions with Government were continuing, Minister Kasukuwere on Tuesday said discussions had reached a dead end.

The platinum producer is 87 percent owned by Impala Platinum of South Africa. Implats is also a 50-50 joint venture partner with Aquarium in Mimosa Mining.

The minister said other non-compliant firms - after receiving seven to 14 days ultimatums - responded with acceptable revised plans that awaited final approval.
These include Mimosa Mining Company - the second biggest platinum producer in Zimbabwe - Murowa Diamonds, Blanket Mine and New Dawn Mining.

Mimosa Mining Company managing director Mr Winston Chitando met Minister Kasukuwere on Tuesday and expressed confidence in a positive response.
British American Tobacco that was also served with an ultimatum has been found to be largely locally owned and will only need to localise 15 percent equity.

Multibay Investments, Quali Exploration and Kwekwe Consolidated Gold Mines have already received final approvals to implement their plans.

"But with Zimplats it has been arrogance all the way. We are going to start the process of writing to the Ministry of Mines (to cancel the licence). The proposal from Zimplats has been deemed to be non-compliant with the law and was therefore rejected," said Minister Kasukuwere.

DISCUSS INDIGENISATION AND BLACK EMPOWERMENT ON FACEBOOK

Proposals from Cargill, Nestle, Barclays Bank and Standard Chartered were also rejected after they were deemed to be non-compliant.

Old Mutual and Stanbic Bank (Zimbabwe) were directed to honour agreements they entered with Government in 2010 and 1992 respectively.

Old Mutual had pledged to cede 27 percent of its stake to employees, 17 percent to local pension funds and 7 percent to the National Indigenisation Fund.

Stanbic had pledged to give workers 30 percent of its equity when it bought the then Grindlays Bank back in 1992, but has not honoured the pledge.

Minister Kasukuwere was yesterday due to meet Finance Minister Tendai Biti to map the way forward regarding the indigenisation of banks.

Government will soon finalise modalities for the manufacturing, transport, agriculture and agro-processing, education, sport and entertainment sectors.

Recommendations for engineering, construction, telecommunications, ICT, finance, arts and culture, energy, trading and health sectors are under discussion.

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

posted by MrK @ 5:16 PM