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.

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