Zimbabwe to seize Zimplats mining land

"President [Robert Mugabe] intends to acquire … part of the land held by Zimplats Holdings Limited," read part of the notice seen by Agence France-Presse on Monday.

The notice, published on Friday, said a parcel of land in the gold and copper-rich Kadoma mining district would now be used "for the benefit of the public".

The mines ministry announced plans earlier this year to seize land being leased by Zimplats in the neighbouring Chegutu district, saying the firm would not be able to exhaust the ore within the tenure of its 25-year lease.

In January, Impala Platinum, the world's number two producer of platinum sealed a deal to sell a 51% stake in Zimplats under a state-imposed black empowerment scheme.

The deal, expected to see Impala get $971-million, is in compliance with a controversial indigenisation law that Mugabe signed in 2010.

The law forces foreign-owned companies – including banks and retailers – to cede 51% ownership to black Zimbabwean investors.

Foreign investment
Mugabe, who a decade ago launched a campaign to seize white-owned farmland, has threatened to take over firms which do not comply.

His partner in a shaky power sharing government, Prime Minister Morgan Tsvangirai, is uneasy with the law, which he says has driven away foreign investment just as the country is recovering from a decade-long economic collapse.

Indigenisation has been blamed for a foreign investment "free fall" as Zimbabwe looks set to retain its third place position on the list of the world's poorest countries.

This free fall has been indicated by figures supplied by the Zimbabwe Investment Authority, which show a 76% drop in foreign direct investment (FDI) this year as compared to the same period in 2012. The figures show that only US$33-million in FDI has been recorded so far this year, whereas during this period last year over US$130-million was recorded.

Economist Eric Bloch said in an opinion piece that this "horrendous decline in foreign investor interest in Zimbabwe as an investment destination should send a very loud message to government, and especially so, as much of Africa is attaining very considerable FDI growth".

"Tragically, however, that message is falling on deaf ears, for there are none so deaf as those who will not hear. That Zimbabwe is not attracting considerable FDI, in contrast to the substantial extent of such investment in various other countries in Africa, is not because it does not have numerous, and diverse, positive resources which provide opportunity for investment," Bloch wrote.

Independent economic analyst John Robertson told SW Radio Africa that last year's FDI figures were very low and have continued to fall, because of the Zanu-PF-led indigenisation campaign. – AFP

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