Zimplats will get no compensation

2012-04-07 14:09

Zimbabwe’s firebrand youth development, indigenisation and empowerment minister, Saviour Kasukuwere, has ruled out any compensation being paid to Implats’ Zimbabwe unit, Zimplats.

The majority-South African owned company ceded a 51% indigenisation stake last month. The announcement in effect puts paid to speculation that the Zimbabwe government may pay for the stake.

The Zimplats 51% stake has been set at an estimated value of $678 million (R5.3 billion), with employees set to own 10%, community share trusts another 10%, while the National Indigenisation and Economic Empowerment Board will receive the remaining 31%.

In an interview with the state broadcaster, the Zimbabwe Broadcasting Corporation, Kasukuwere ruled out compensation and said: “We will not pay for what belongs to us. We are ascribing a value for our resources vis-à-vis the investment made. We will then determine the ownership structure.”

Adding further: “What should be made clear is that this is what we call the intrinsic value of our subsoil assets, where the minerals are.

“Where these resources are there is a value and, yes, the value increases when you mine them, so we have taken that into account.”

Speaking to City Press at the start of preparations to roll out the indigenisation programme to the Matabeleland South province, Kasukuwere underpinned the refusal to pay compensation to Zimplats as linked to the “unfair value” that the government had continued to receive “for a long time” from foreign-owned mines.

“Last year, mining companies in Zimbabwe, most of which are foreign owned, exported over $1 billion worth of minerals. Only 15% of this amount was paid to government, meaning that the resources have not been beneficial to the people of Zimbabwe.

“Hence we ask, why must we be forced to pay for what belongs to us? The resources are ours,” said Kasukuwere.

Meanwhile, the indigenisation programme is gathering steam, with the indigenisation minister set to roll out community share ownership trusts from 18 mines in the gold-rich mining town of Gwanda in the Matabeleland South province this month.

Some of the foreign-owned mines set to cede a 10% stake and $10 million under the community share ownership trust include Blanket Mine, owned by Canada’s Caledonia Corporation, and South Africa’s cement manufacturer, Pretoria Portland Cement.

Economic observers warned that Kasukuwere’s refusal to compensate Zimplats could set off investor flight and turn the indigenisation programme into a grab policy that has the hallmarks of the country’s farm invasions in 2000.

John Robertson, a Harare-based economic commentator, said: “If they won’t pay for the shares, they won’t get them. Money is needed to run the mines at some point or other. Kasukuwere just has to start paying up or this will be a repeat of the farm invasions.”

In 2000, Zimbabwe refused to pay compensation to the 4 500 white commercial farmers forcibly evicted from their farms by war veterans, a militant-styled group loyal to President Robert Mugabe.

The farm invasions led to a fall in agricultural production and fears are growing that the uncertainty generated by the indigenisation programme could also see mining production dip.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.