Implats Zimbabwe deal in balance
Sunday Independent, January 14, 2013
By Peta Thornycroft
The decision by South Africa’s Implats on Friday to sell a majority of its
Zimbabwe platinum assets to Zimbabwe comes with many strings attached.
The deal would not go ahead until the Zimbabwe government settled its R1
billion debt for land it bought from Implats in 2006, mining sources said.
Implats agreed to sell the government a portion of its platinum-rich land in
central Zimbabwe at a huge discount, hoping to secure some empowerment
credits.
But the Zimbabwe government did not give Implats any empowerment credits,
nor did it pay for the land. So it now owes Implats about R1.23bn.
Implats owns about 84 percent of Zimplats, its operation in Zimbabwe. Under
the deal agreed last week, 20 percent of shares in Zimplats will go to
Zimbabwe trusts. But it is not clear what those trusts will earn as Zimplats
has never paid a dividend, because its profits have always been reinvested
in expansion.
The 31 percent shareholding which Zimplats made available for sale to the
largely bankrupt Zimbabwe government will be valued independently. But
insiders predict the shares will cost between R2.4bn and R3.2bn.
“So many people in South Africa and beyond seem to be under the impression
that Zimbabwe’s indigenisation process means shares are being handed out for
free,” said a senior mining consultant who has monitored the deal for
several years.
“That is not the case. The shares have to be bought and paid for.”
There are several unanswered questions about how the Zimplats shares will be
paid for as local investors appear to have no money to purchase them, and
certainly the government can’t pay for them unless it cancels all financial
support for health, education, the military and more.
“The shares could not be bought by loans from dividends as Zimplats has
never paid any dividends. At a propaganda level it looks great for Zanu-PF
and the indigenisation ministry, but the reality is different,” the
consultant said yesterday.
Who is going to pay the debt for that land and who is going to pay for the
shares?
The existing management of the mining operations will remain where it is,
dependent largely on expatriate expertise.
And the complex minerals extracted from the Zimbabwe sites will continue to
be processed in South Africa, as there is no refinery in Zimbabwe. –
Independent Foreign Service