Zimbabwe's Mugabe ordered the nationalisation of platinum mines some months ago and companies have until September 25 to present "indigenisation" plans. Indigenisation minister Saviour Kasukuwere has accused Zimplats, owned by South Africa's Impala Platinum, of noncompliance and has threatened to revoke its mining licence.
Zimbabwe government representatives have already informed foreign mining investors who are urged to transfer their majority stakes to the government that they will not be compensated financially. Zimbabwe is the world's third largest producer of platinum, leading to rising concerns over supply. Companies have been ordered to hand over majority stakes in all mining concerns by September 25. Experts expect the situation to eventually spiral into the complete nationalisation of Zimbabwe's mining industry.
Zimplats is among 11 companies given an ultimatum by the government. Indigenisation minister Kasukuwere said yesterday that the companies concerned were trying to defy Zimbabwean laws.
On Tuesday, President Mugabe, the man that gave the world the 100 trillion dollar note, said in a parliamentary speech that foreign investors did not have to fear a wave of expropriation. However, Mugabe called on foreign investors to obey the country´s laws. Decreasing confidence in property rights in the region will lead to the cancellation or reduction of planned mining projects. This situation could contribute to an additional reduction of the global platinum and palladium supply.
The price of both precious metals is highly dependent on future demand among industrial users, which has declined in recent weeks. Growing economic concerns in the United States and Europe weighed on platinum and palladium prices, which are mainly used by the automotive industry. However platinum prices have unexpectedly rallied in recent weeks, temporarily carrying the white metal above $1,900 per troy ounce. Investment demand for the precious metal has recently grown, although it is still tiny compared industrial demand.
