Zimplats gives in to Mugabe’s mine-grab law

2011-10-29 11:13

Zimbabwe’s mines, frightened into submission by the Youth Development, Indigenisation and Empower­ment Minister Saviour Kasukuwere, have begun complying with the country’s 51% indigenisation law.

The largest foreign-owned mining company in Zimbabwe, Zimplats, has taken the lead among the “big five” in the industry – which include Rio Tinto, Anglo Platinum, Aquarius Platinum and Mimosa.

It has ceded a 10% stake to locals and handed over $10 million (about R78 million) to a community share ownership trust that is expected to benefit the communities of Mhondoro-Ngezi and Chegutu – where Zimplats carries out its platinum mining.

But the deal, sealed with pomp and fanfare earlier this month and attended by President Robert Mugabe at the company’s Selous offices, is perceived by economic observers as a time-buying ploy by the platinum giant to seek further concessions from the Zimbabwe government.

In the past, Zimplats has been on a collision course with the government and it maintained that the 51% stake stipulated by the Economic and Empowerment Act of 2007 was “too high”.

In retaliation, government threatened to cancel Zimplats’ mining licence in September .

Economist Eric Bloch said: “I don’t think Zimplats will just give away its shareholding as easily as is suggested by the launch of the community share ownership trust.

Giving away something now definitely helps to ease the mounting pressure on them, but what is even more interesting are behind-the-scenes manoeuvres from both Zimplats and government.”

A source at the Zimbabwe Chamber of Mines, a consortium of mines, said: “Zimplats is pressing the government to cede only 40%, and if approved this is a model other mining companies would emulate.”

There are widespread allegations that Zimplats is trying to cut secret deals with senior Zanu-PF politicians, with the latest charge being that the company bought a car for a government minister. It has denied the allegations.

But for Kasukuwere, Zimplats ceding 10% signals the apex of his empowerment push and to Zimbabwe’s mining sector the waning resistance by its largest mining company.

He said: “We are changing our country. The economy will be controlled by our people. The community empowerment trusts are taking shape and the bottom of the pyramid will never be the same again.

Work under way will make us all proud. Implementation is what we are now doing.”

Political analyst Alex Magaisa said: “The community trusts are a noble idea, but it would be a shame if the community trusts were hijacked by politically interested individuals, including political parties, to benefit from the resources under the guise of empowering local communities.”

The trusts are likely to be an electioneering tool by Zanu-PF as it seeks to curry favour with voters ahead of elections expected next year.

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