Maravi

(NEWZIMBABWE) Controversial Zimplats deal up for review
31/10/2013 00:00:00
by Staff Reporter I Agencies

THE government will review a plan by South Africa's Impala Platinum to sell control of its Zimplats unit to local black investors for $971 million, Zimplats said on Thursday.

Implats, the world's second-largest platinum miner, in January agreed to sell a majority stake in Zimplats to local investors under the controversial "indigenisation" programme championed by President Robert Mugabe.

But the deal was the subject of huge controversy over allegations of possible irregularities that led to public spats between the then empowerment minister Saviour Kasukuere and central bank governor Gideon Gono.

Eyebrows were further raised when Harare-based firm Brainworks demanded US$17 million for consulting on the deal which Zimplats refused to pay.

Mugabe, following his re-election in July as Zimbabwe's long-serving president, replaced the minister in charge of the indigenisation drive, which seeks to give local blacks majority stakes in foreign firms operating in the country.

In a statement accompanying its July-September results, Zimplats said Zimbabwe's new indigenisation minister, Francis Nhema, would review the agreement as well as discuss Harare's plans to reposess half of the company's mining claims.

"Following the installation of a new government, the company's indigenisation plan will now be reviewed by the new Minister of Indigenisation," Zimplats said.

"These discussions will also include further engagement on the previously announced land acquisition by government."

It was not immediately clear why the government was undertaking the review.
Nhema could not be reached for comment on Thursday.

The Zimplats deal is Zimbabwe's largest local ownership transaction and was viewed as a major scalp for Mugabe's controversial black economic empowerment push, which was the centrepiece of his re-election campaign.

Implats, together with Aquarius Platinum, have also agreed to sell a 51 percent stake in their Zimbabwean joint venture Mimosa mine to locals in a $550 million deal to meet affirmative action targets.

Zimplats reported a 77 percent jump in operating profit to $40 million during the quarter, thanks to increased revenue from sales.

Nhema told the state-owned ZBC on Wednesday that he will review all the indigenisation and economic empowerment agreements signed so far to ensure that they were sustainable.

Last month, the minister approved a deal for gold miner, New Dawn which saw indigenous players getting 42 percent shareholding instead of the mandatory 51 percent, giving foreign owned companies hope that the government would be flexible in its application of the empowerment law.

posted by MrK @ 5:41 PM