ALL FOREIGN-owned mining companies in Zimbabwe will be required to sell a majority stake to local Zimbabweans by the end of next September, according to new regulations published yesterday by government.
The unexpected publication of the rules in the Zimbabwean Government Gazetteis an expansion of President Robert Mugabe's controversial Indigenisation and Economic Empowerment Act, which was issued last year amid widespread international condemnation.
“A controlling interest, or the 51 per cent of the shares or interest which in terms of the Act is required to be held by indigenous Zimbabweans in non-indigenous mining business,” the gazette said.
Under the original Act all companies valued at more than €355,000 had to sell a majority stake to indigenous locals, but this has been reduced to 70 cents in the case of mining houses.
Zimbabwe has the world’s second-biggest platinum and chrome reserves and the new diamond fields found in Marange in the east of the country are said to have some of the richest deposits in the world.
The Johannesburg Stock Exchange was down about 1 per cent by midday, as the share prices of a number of mining houses were adversely affected by the news. Aquarius Platinum, the world’s fourth largest primary platinum producer, was down more than 7 per cent to €3.93.
The law goes on to say the government and affected firms will jointly calculate the value of the shares to be disposed of.
“The state’s sovereign ownership of the mineral or minerals exploited or proposed to be exploited by the non-indigenous mining business concerned” will be taken into account, it adds.
Companies will have until May 9th next to finalise their sales plans and transactions must take place by September 25th.
Critics say the law is an attempt by Mr Mugabe and his loyalists to enrich themselves. Its application has been vague and patchy in terms of who qualifies for waivers. Some Chinese mining companies have been given an exemption from the new law because of their involvement in national projects.
Yesterday’s amendments came a day after Mr Mugabe insisted government would ensure foreign companies are “junior partners” in the country. “We are taking back our country,” he said in the capital, Harare.