Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Govt won’t pay for mining shares: Kasukuwere

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 

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.”


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