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Zimplats fighting Zimbabwe's indigenisation policies

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Published : March 02nd, 2012
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FOLLOW : South Africa, Zimbabwe
Category : Investing

 

 

 

 

The government of Zimbabwe is continuing with its "indigenisation" process by forcing foreign mining companies to transfer shares in their enterprises to a government fund. Nationalisation laws were passed in May 2011, but the South African mining company Impala Platinum (Implats), the world's second largest platinum producer, continues to refuse to transfer shares of its Zimbabwean subsidiary Zimplats. Despite this, yesterday Lionel October – Director-General of the South African Department of Trade and Industry – claimed that investing in neighbouring Zimbabwe is still safe.


Despite warnings that mining companies operating in Zimbabwe might get their production licenses withdrawn (or worse) Zimplats firmly refuses to follow the instructions given by Robert Mugabe's government. In the fall of last year Savior Kasukuwere, Zimbabwe's Minister of Youth Development, Indigenisation and Empowerment, warned Zimplats of the possible consequences should the company's management continue to oppose official regulations. According to the law passed in May 2011, foreign mining companies had until September to transfer a portion of their shares to a national fund. Aside from Zimplats, and up until the September deadline, another 11 companies refused to follow the official decree. Zimplats is supposed to hand over 29.5% of its shares. Kasukuwere has warned companies that they could get their mining licenses withdrawn. Nothing has happened so far.


The disastrous facts surrounding the confiscation of white-owned Zimbabwean farmland back in 2000 doesn't offer much in the way of support for the Zimbabwean government's plans for the mining industry. In the last decade Zimbabwe's agricultural production has dropped by £7 billion, equal to a 70% decline in production. Yesterday, however, Lionel October of South Africa's Department of Trade and Industry tried to soothe emotions on both sides. He argued that the Zimbabwean government's indigenisation measures are not necessarily a concealed form of nationalisation. October claimed that foreign companies can continue to invest safely in Zimbabwe – a statement that many would have serious issues with. Since Zimplats is the biggest South African investment in Zimbabwe, the South African government has attempted to wring concessions out of Mugabe's government on this issue - but the latter appear unmoved by South African claims. According to October, instead of opposing the country's laws, investors should seek new ways of cooperating with their Zimbabwean partners.

 

 

Thanks to Goldmoney from www.goldmoney.com
Companies Mentionned : Implats | Zimplats |
Data and Statistics for these countries : South Africa | Zimbabwe | All
Gold and Silver Prices for these countries : South Africa | Zimbabwe | All
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