Govt won’t pay for mining shares: Kasukuwere
17/04/2011 00:00:00
by Business Reporter
IN remarks that may rattle the country’s mining sector further,
Indigenisation and Empowerment minister, Saviour Kasukuwere has hinted that
the government may consider the value of minerals to be equal to 51 percent
of the value of companies and so pay them nothing.
Under the country’s indigenisation legislation, foreign-owned companies must
give up at least 51 percent of their shareholding to locals as part of
measures to economically empower the country’s previously marginalized black
majority.
But investors are concerned that neither the government nor any of the
intended beneficiaries can raise the cash needed to take up the equity which
some analysts have estimated at more than US$1 billion.
Speaking in an interview after addressing mining companies and others at a
closed conference organised by the SA Institute of International Affairs in
Johannesburg Kasukuwere said it did not make sense to make Zimbabweans pay
for their minerals.
“Why should I pay for minerals that belong to us? You can’t value on the
basis of an asset that is not yours. Then I have to tax the people of
Zimbabwe to pay for their resources,” Kasukuwere said.
Asked if this meant miners risked getting nothing for their shares,
Kasukuwere said: “That’s a commercial decision, isn’t it? I mean if it makes
sense that you’re going to be exploiting these resources worth so much, if
it makes sense, then that is how we must proceed.”
Prodded further on whether the policy would be implemented along the lines
of the country’s land reforms, Kasukuwere ominously remarked: “Exactly. It’s
the same…”
Zimbabwe has given miners until May 9, 2011 to submit plans for complying
with the indigenisation law and – if approved by the government – six months
to complete the divestiture of at least 51 percent of their shareholding.
The Chamber of Mines has already warned that the legislation risked slowing
growth in the sector while critics say the policy will scare-away
much-needed investment.
But Kasukuwere said there was no need for panic.
“I think it is always better that investors are at ease in jurisdictions
where they are working and that there is fair benefit that also accrues to
the people of the country,” he said.
He also dismissed concerns that ordinary Zimbabweans would ne benefit from
the measures with the shares going to politically-connected people.
“We’ve basically warehoused the shareholding on behalf of the majority of
Zimbabweans so that we can allow the majority to participate in the fund. It’s
a board that spearheads empowerment processes and programmes. Secondly, we
are setting up the Sovereign Wealth Fund to store value for generations to
come,” he said.
“Thirdly, we have a partnership that can be entered into with the Zimbabwe
Minerals Development Corporation. And to some extent workers and management
as well as communities will be considered.”