complete with free falling white devil.
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| Africa: Subsaharan |
| Zimbabwe Mines Face Compulsory Equity Sale |
| 2005-08-17 |
| Harare - Zimbabwe is taking legislative steps to force foreign-owned mining houses to cede 30% equity to local black investors in the next 10 years. Most of the mines in Zimbabwe are foreign owned and the move could help redress this imbalance. However, the timing and motives of the legislation, 25 years after independence, will undoubtedly fuel uncertainty in the country's troubled economy, which is struggling to attract foreign direct investment. Analysts also argued the move was a ploy by the forex-strapped government to retain some of the mining sector's profits. Fears were raised that, as with their South African counterparts, mining stakes will be secured by a well-connected elite close to the government. Draft regulations to be inserted into the Mines and Mineral Act through a statutory instrument show government is mulling over plans to reform the sector using SA's mining charter as a model. The amendment, yet to be tabled before parliament, says: "In order to increase participation and ownership by historically disadvantaged persons in the mining industry, companies shall achieve 30% ownership of the industry assets in 10 years of which 20% shall be achieved in two years, 25% in seven years and 30% in 10 years from the date on which these regulations take effect. "Mining companies shall give historically disadvantaged persons a preferred supplier status, where possible, in all three levels of procurement, namely capital goods; services; and consumables." Mining companies will now have to apply to the mining department when they want to import capital goods, services or consumables and justify their actions -- a requirement that analysts said could cripple their operations given the inefficiency of the Zimbabwean government's bureaucracy. However, the regulations do not say how the locally held 30% stakes are to be funded. Zimplats, owned by Impala Platinum, has already offered 15% to local investors who have, however, failed to fund the stake and have been fighting over it for the past two years. Borrowing rates in Zimbabwe are at astronomically high three-digit levels. Mines Minister Amos Midzi would not comment on the draft yesterday, saying he was "too busy". Chamber of Mines CEO David Murangari was also not available for comment. Although the Zimbabwean plan is meant to transform the mining sector, dominated by British, South African and Australian companies, it has been dogged by controversy stemming from repeated official threats to nationalise foreign companies, including mines. International mining companies operating in Zimbabwe include Anglo America, Rio Tinto, Implats, Mimosa Platinum, and Aquarium Platinum. Implats financial director David Brown says the 30% figure bandied about was not dissimilar from empowerment requirements in SA, which his company was comfortable with. He suggested that funding empowerment deals in Zimbabwe was likely to be more challenging than in SA. "These requirements need to be balanced with what is do-able in reality," Brown said. He said this requirement should be "almost reversed", given what was achievable in reality. Rio Tinto's London office said it would not comment before the bill was published. Anglo American, which has significant mineral assets in Zimbabwe, also said it was unable to comment on a document they had not yet seen. President Robert Mugabe has often threatened forced company takeovers. A few years ago Mugabe's supporters invaded companies' premises, trying to take them over by force. Although the mining sector has been slowly recovering in the past 18 months, with mineral exports increasing 10% in the first quarter, it is still reeling from a skewed exchange rate, foreign currency shortages and high inflation. Zimbabwe produces minerals such as platinum, diamond, gold, black granite, coal, chromate, cobalt, graphite, iron ore, iron pyrites, lithium minerals, magnesite and nickel. The mining sector's foreign-exchange contribution has also fallen in recent years from more than 30% of the country's total net |
| Posted by:anonymous5089 |
| #8 Thanks Thabo Mbeki! Your enabling allows this country to dive into chaos, death, hunger, and corruption. Good example for anyone else facing a rebel insurrection. Fight to the death |
| Posted by: Frank G 2005-08-17 18:59 |
| #7 Bingo Robert. It government forced participation in graft and feather bedding. |
| Posted by: Sock Puppet 0’ Doom 2005-08-17 18:31 |
| #6 local black investors Odd way of saying "Mugabe's family". |
| Posted by: Robert Crawford 2005-08-17 10:12 |
| #5 You can screw with the food, but touch the foreign owned mines and Bang! |
| Posted by: Angart Whereling4308 2005-08-17 10:06 |
| #4 This graph charts the future of the Zimbabwean enconomy. complete with free falling white devil. |
| Posted by: bigjim-ky 2005-08-17 09:12 |
| #3 You could say they should have been black-owned for 25 years, then charge them back rent. Naw, no place is that bad. |
| Posted by: Jackal 2005-08-17 08:57 |
| #2 Can't wait to tell my brother Farmin about this! I be all excited! |
| Posted by: Mynin B. Hard 2005-08-17 08:54 |
| #1 Let's see what else we can ruin! Is anything left? /Bob |
| Posted by: Spot 2005-08-17 08:30 |