Zimbabwe may reduce demand for black ownership to 15%
July 26, 2010, 11:38 AM EDT
By Ron Derby
July 26 (Bloomberg) -- Zimbabwe may water down a demand that foreign
companies hand over majority stakes in their local operations to black
investors, instead asking that they sell 15 percent holdings and invest in
social programs, the country's Chief Mining Commissioner said.
Achieving a 51 percent black-ownership level was proving to be the "major
obstacle" to implementing the law, Chief Mining Commissioner Fredson Mabhena
said in Johannesburg today. "It looks like direct equity could be a 15
percent stake, with the balance achieved through corporate social
investments." The terms of the bill have yet to be completed, he said.
The proposed black ownership legislation was scheduled to come into effect
on March 1, giving companies worth more than $500,000 five years to increase
the proportion of their assets owned by black investors, according to a copy
of the law distributed by non-governmental organization Veritas Trust.
Zimbabwe on May 18 extended a deadline by which all affected businesses must
say how they plan to meet the requirements, Indigenization and Empowerment
Minister Saviour Kasukuwere said that day.
Zimbabwe is trying to rebuild its economy after a decade of political
turmoil and recession under the leadership of President Robert Mugabe. The
country has the world's second- largest reserves of platinum and chrome
after South Africa, as well as deposits of gold, coal, diamonds and nickel.
Mining companies would be among the first businesses targeted in the effort
to hand control to black Zimbabweans, Kasukuwere said on April 21 from the
Anglo American Plc, which controls the world's biggest platinum producer,
and South African insurer Old Mutual Plc both have operations in the
country. Impala Platinum Holdings Ltd., the second-largest producer of the
metal, said on May 17 it is pushing ahead with a $500 million expansion in
Zimbabwe even as talks with government over black-ownership rules continue.
Black investors in Zimbabwe are facing difficulties raising funds to buy
controlling stakes in foreign-owned companies in the country, Anglo Platinum
Ltd. spokeswoman Mary-Jane Morifi said by mobile phone. "We're engaging with
government to come up with a solution which is a win-win for company and
The company, which is 79.7 percent owned by Anglo American, is drawing up
plans to boost its involvement in infrastructure development and "other
community programs" in Zimbabwe, she said. Anglo Platinum's Unki mine, being
built in the south of the country, is scheduled to start production in the
fourth quarter of the year.
"Investors are saying they can't invest until they know" the final terms of
the black-ownership laws, Mabhena said. "We've been consulting and listening
Aquarius Platinum Ltd. operates in Zimbabwe, while Rio Tinto Plc has a