Africa (Business)

RioTinto mine hands over 51% stake in Zim equity deal

Staff Reporter

Murowa Diamonds has ceded 51% of its equity to Zimbabwe to comply with a new law giving local blacks majority shares in foreign companies.

Mining multinational RioTinto’s Zimbabwean subsidiary Murowa Diamonds has ceded 51% of its equity to comply with a new law giving local blacks majority shares in foreign companies, a report said on Saturday.

“Murowa Diamonds wrote to us yesterday [Friday] saying they have given up 51% shares and these would be given to our people,” the state-owned Herald newspaper quoted Indigenisation Minister Saviour Kasukuwere as saying.

Zimbabwe gave foreign companies including banks and mines up to September 25 to submit plans to sell 51% of their shares to the black community by 2015.

An official in the indigenisation ministry said around 700 companies had missed the deadline, warning them to follow the law or risk de-registration.

But Zimbabwe has also proved willing to strike individual deals with companies, giving platinum-mining giant Zimplats more time to submit its proposal and allowing British insurer Old Mutual to conduct a “first phase” of compliance by handing over 25% of its shares.

Long-ruling President Robert Mugabe says the indigenisation law aims to fight poverty and put control of the economy in local hands but the scheme has raised tensions within the shaky unity government with Prime Minister Morgan Tsvangirai.

Tsvangirai’s party, which holds most economic portfolios in government, fears the law will scare off investors.—AFP

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