New minister may thwart Zimplats indigenisation deal

Impala Platinum will this year increasingly focus on its Zimbabwean unit, Zimplats – which, according to chief executive Alex Mhembere, has made “tangible progress” with its bid to finalise its compliance with Zimbabwe’s contentious indigenisation laws.

The worst appears to be over for the company, especially with the government appearing to take into consideration empowerment credits as part of the indigenisation plan, informed sources told the Mail & Guardian this week.

The nearly $1-billion indigenisation compliance term sheet that Implats signed with former empowerment minister Saviour Kasukuwere is no longer binding. It is being reviewed to rule out monetary compensation for shares ceded to the government by Zimplats, the company has said.

“We have made tangible progress on the ground, in terms of some aspects of the 51% [shareholding] we believe we will be able to put to rest soon,” Mhembere said.

But in what may spell bad news for Implats, Zimbabwe now has a new indigenisation minister, Christopher Mushohwe, after Francis Nhema was removed from the helm of the ministry. Nhema took over the reins from Kasukuwere after President Robert Mugabe’s Zanu-PF won the July elections.

‘Lucky’ investors
Mushohwe was not immediately available for comment. He did say, however, in December that foreign investors would be “lucky” to secure a 49% share in local companies: “So it’s not cast in concrete that it’s 49%; it can be 1 % because [49%] is the maximum [foreign shareholding], and 51% can be 99% because it’s the minimum [local shareholding].”

Sources say Nhema, who had adopted a softer approach towards enforcing the indigenisation policy, was considering empowerment credits for the Zimplats plan. The initial deal gave Zimplats concessions that included a state obligation to repay $153?million worth (about 51-million ounces) of unmined platinum reserves that the company gave to the government for empowerment credits in 2000.

There had been earlier indications that the government would renege on this agreement, however, when Mugabe said the state would not pay for shares ceded by foreign mining companies.

Executives at the company said the issue of empowerment credits had been “tabled and discussed with the previous minister of indigenisation”, adding that the company now has to “engage with the new minister and find out if there is going to be any change in terms of his views with regard to empowerment credits”.

“There are some aspects that still have to be looked at again and again. The emergence of a new minister after the Zanu-PF conference in December means that the tone of discussions will obviously change,” one of the sources said.

Government engagement
Mhembere would not say when he expects the issue to be finalised, although he maintained that engagement with the government had been premised on a common understanding of the need for both parties to extract value from Zimbabwe’s mineral endowments.

“The issue in terms of indigenisation for the entire country has not been put to rest. We have not really been racing against years; we have been racing against doing the right things. We have been saying let’s work and find a solution that works best,” he said.

Zimplats produces around 270 000 ounces of the precious metal a year and is now in the process of reviving a refinery facility previously owned by BHP Billiton. Platinum miners in Zimbabwe are under pressure to build beneficiation facilities, but the deadline has been extended to the end of next year.

“We had already indicated to them before that the December [deadline] wasn’t practical. We are happy with the extension that the minister has granted,” said one platinum miner.

Sources indicate that Zimplats is progressing well with the first phase of its beneficiation facility that will cater for its own feed. Zimplats has already placed orders and paid deposits for “long-lead items such as the oxygen plant”, which it expects to take delivery of by November and start running early next year.

Collision course
But fellow mining companies Anglo Platinum and Aquarius Platinum are potentially on a collision course with the Zimbabwean government, as they have said they are not going to build refineries of their own.

Zanu-PF resolved during its December elective congress that the government should enforce measures to compel all mining companies in Zimbabwe to refine the minerals they mine in the country. Other mining companies are now exploring options to upgrade and use facilities owned by two Zimbabwe-listed mining companies, RioZim and Bindura Nickel Corporation (BNC). BNC owns a smelter facility in Bindura and RioZim, which jointly owns the Murowa diamond mine with Rio Tinto, operates the Empress Nickel Refinery in Kadoma.

Project teams have already been commissioned to carry out studies into how the facilities can be upgraded and used.

Subscribe to the M&G for R2 a month

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

And for this weekend only, you can become a subscriber by paying just R2 a month for your first three months.

Related stories

Did Botswana execute ‘poachers’ ?

The Botswana Defence Force’s anti-poaching unit has long been accused of a ‘shoot to kill’ policy. Over 20 years the unit has killed 30 Namibians and 22 Zimbabweans

Malawi elections provide a global lesson in democracy

COMMENT: Opposition candidates and party can increase their chances of success at the polls by putting aside minor differences and presenting a united front

Dambudzo Marechera’s literary shock treatment

A new book on Zimbabwean writer Dambudzo Marechera draws on both actual and imaginary archives

Tsitsi Dangarembga: Are we mourning ourselves, each other and this state we are in?

The author discusses the trilogy of novels that propelled her onto the Booker shortlist, and their relevance to present-day Zimbabwe

Tendele’s mine pollutes their air and water, residents claim

The mining company says it complies with both the Air Quality Control Act and the Health and Safety Act, as well as conducting extensive research before starting operations

Joe Biden’s debate guests run the only Zimbabwean restaurant in America

A Zimbabwean restaurant feeding people in need formed an unlikely addition to Joe Biden’s election campaign

Subscribers only

Q&A Sessions: Frank Chikane on the rainbow where colours never...

Reverend Frank Chikane has just completed six years as the chairperson of the Kagiso Trust. He speaks about corruption, his children’s views and how churches can be mobilised

ANC: ‘We’re operating under conditions of anarchy’

In its latest policy documents, the ANC is self-critical and wants ‘consequence management’, yet it’s letting its members off the hook again

More top stories

Covid-19 stems ‘white’ gold rush

The pandemic hit abalone farmers fast and hard. Prices have dropped and backers appear to be losing their appetite for investing in the delicacy

Al-Shabab’s terror in Mozambique

Amid reports of brutal, indiscriminate slaughter, civilians bear the brunt as villages are abandoned and the number of refugees nears half a million

South Africa’s cities opt for clean energy

Efforts to reduce carbon emissions will hinge on the transport sector

How designing ‘green’ buildings can help to combat the climate...

South Africa’s buildings account for 40% of the country’s greenhouse gas emissions. But the City of Johannesburg’s new draft green buildings policy aims to change that

press releases

Loading latest Press Releases…