/ 9 September 2011

SA companies fall foul of Zim’s indigenisation laws

Saviour Kasukuwere, Zimbabwe’s youth development, indigenisation and empowerment minister, has ratcheted up his drive for local control of the mining industry by threatening to cancel the operating licence of Zimplats, a subsidiary of South African platinum giant Implats and the largest foreign-owned mining company in Zimbabwe.

A ‘two-week-long” moratorium extended by Kasukuwere to Zimplats and other foreign-owned miners, including Rio Tinto, Aquarius and Anglo Platinum, expired on September 2.

As his ministry gave the green light to empowerment proposals from 45 other foreign-owned mining ­concerns, an irritable Kasukuwere told journalists this week that negotiations with Zimplats were a ‘dialogue of the deaf”.

‘We have done everything in our power to negotiate with Zimplats but they continue to find loopholes. Zimplats continue to defy the laws of this land and continue to abuse the process. We have tried to engage them in a manner that achieves a win-win situation but it appears that, as government, we have reached the end of the road.”

It is understood that Zimplats has been seeking to push through a 26% share handover, with a further 25% to be awarded through social credits. The Indigenisation and Empowerment Act requires the transfer of 51% of the shareholding to Zimbabweans.

Under the gazetted regulations, mining companies have until the end of September to come up with ‘acceptable” proposals, which is construed to mean the full 51% stake.

Zimplats employs nearly 4 000 workers in Zimbabwe and wants to channel a $10-billion ­investment into its mining operations to increase production. It posted a $200-million after-tax profit in its year-end results, a 64% increase on last year’s $122-million.

Muchadeyi Masunda, chairperson of Zimplats, said this week: ‘We are already in a hole as a country and we should stop digging in. We have never said we are anti-indigenisation and our track record speaks for itself. I don’t know whether Kasukuwere is grandstanding or not, but we don’t have any issues with the government.

‘We remain committed to sitting down not only with Kasukuwere, but Mines Minister Obert Mpofu and other ministers interested,” said Masunda. Meanwhile, Kasukuwere has given insurance giant Old Mutual a seven-day deadline to comply with empowerment laws. Old Mutual is the single largest investor on the Zimbabwe Stock Exchange and a pillar of various economic sectors, including real estate, pensions, the media industry and insurance services.

In response to empowerment laws, Old Mutual last year offered to off-load a 27% shareholding to employees, 17% to local pension funds and 7% to the National Indigenisation Trust Fund.

Old Mutual chief executive Luke Ngwerume could not be reached for comment.