Zim to take over foreign-owned mining firms

All foreign-owned mining companies in Zimbabwe will be required to sell majority stakes to locals within six months, under new regulations released on Monday.

The controversial Indigenisation and Economic Empowerment Act issued last year required all foreign firms valued at more than $500 000 to sell 51% stakes to locals.

The new rules, published without warning on Monday, expand the law to include all mining companies valued at more than $1

“A controlling interest, or the 51% of the shares or interest which in terms of the Act is required to be held by indigenous Zimbabweans in non-indigenous mining business,” the new law said in the Government Gazette.

Companies are expected to complete their sale plans by May 9, and transactions must be finalised by September 25, according to the Gazette.

‘Very messy’
“It’s very messy and it is a harsher approach to the mining sector,” economist John Robertson said. “It is politically inspired.

The disposal of 51% of the shares in mining companies to indigenous Zimbabweans will apply to all companies with a net asset value of more than one US dollar.”

The law is strongly supported by President Robert Mugabe and has created tensions within the unity government, with Prime Minister Morgan Tsvangirai charging that it will discourage investment.

Shares of foreign mining companies, including London-listed Aquarius Platinum and Australian-listed Zimbabwe Platinum Mines, have plunged due to uncertainty around the law since its original release one year ago.

Zimbabwe has been working to attract investors after a decade of political turmoil which has seen the collapse of its economy.—AFP