Zimbabwe: local mine ownership drive near complete

JOHANNESBURG Mon Apr 16, 2012 2:37pm EDT

Zimbabwe's Minister of Youth Development, Indigenisation and Empowerment Saviour Kasukuwere speaks during the Reuters Africa Investment Summit in Sandton April 16, 2012. Zimbabwe's empowerment minister expects to finalise the transfer of majority stakes in foreign mining companies to local black investors by the end of April. Kasukuwere, a rising star in President Robert Mugabe's ZANU-PF Party, has been the enforcer-in-chief of a controversial law that requires foreign companies to hand over 51 percent of their holdings in the country to black investors. REUTERS/Siphiwe Sibeko

Zimbabwe's Minister of Youth Development, Indigenisation and Empowerment Saviour Kasukuwere speaks during the Reuters Africa Investment Summit in Sandton April 16, 2012. Zimbabwe's empowerment minister expects to finalise the transfer of majority stakes in foreign mining companies to local black investors by the end of April. Kasukuwere, a rising star in President Robert Mugabe's ZANU-PF Party, has been the enforcer-in-chief of a controversial law that requires foreign companies to hand over 51 percent of their holdings in the country to black investors.

Credit: Reuters/Siphiwe Sibeko

JOHANNESBURG (Reuters) - Zimbabwe's empowerment minister expects to finalize the transfer of majority stakes in foreign mining companies to local black investors by the end of April.

Saviour Kasukuwere, a rising star in President Robert Mugabe's ZANU-PF Party, has been the enforcer-in-chief of a controversial law that requires foreign companies to hand over 51 percent of their holdings in the country to black investors.

"With the mining sector, I am pretty certain that by the end of April we must have dusted and completed the transactions that have already been agreed to," Kasukuwere told the Reuters Africa Investment Summit on Monday.

"I would say in the main there has now been compliance and now it's just a question of dotting the Is and crossing the Ts," he said at Reuters office in Johannesburg.

Kasukuwere remained vague about the policy's details or how it would be funded. He said only $10 million had been allocated for it in the national budget this year, a fraction of what the stakes would cost.

And he gave no indication that the government planned to pay for any stakes in Zimplats (ZIM.AX), the Zimbabwe unit of Johanensburg-listed Impala Platinum (IMPJ.J), the world's second-largest platinum producer.

"We are at a delicate stage now in terms of the conclusion of the Implats agreement ... What I can clearly state here is that we are taking into account the sovereign; the rights of our people to the resources. That is a key factor in the computation of the final agreement," he said.

"The right to operate is granted by the people of Zimbabwe, by the country - that is the sovereign ownership. So the right to mine must be taken into account," the minister added.

Implats outgoing CEO David Brown and Kasukuwere were for months locked in a bitter war of words and while they publicly buried the hatchet in March, the details of their final settlement remain a mystery.

Implats has said it will comply by ceding 20 percent to local communities and employees and by selling 31 percent to the government for its National Indigenization and Economic Empowerment Fund. But it has been adamant the state will pay.

At its current share price, a 31 percent chunk of Zimplats would be worth around $350 million or 35 times the amount the government has in its budget for such purposes.

NOT NATIONALISATION

Kasukuwere said there was a proposal to bring in a tax to help fund the program and said it was not akin to nationalization as the local private sector was also raising money to buy stakes.

"People thought we were going to wake up overnight and start grabbing these companies. We've not done that," he said.

"We are not saying to the private sector: Don't become involved. So people are sitting down and structuring these deals through vendor financing, borrowing ... commercial banks, collective groupings coming together to acquire stakes."

Unlike the seizure of white-owned farms for redistribution to black Zimbabweans launched over a decade ago, Kasukuwere said no company had been grabbed under the banner of this policy.

"There's not been any compulsory acquisition of a business in Zimbabwe. All that businesses have done themselves is comply with the laws of our country," he said.

"Everybody expected us to carry out this indigenization process in a very chaotic manner ... We will follow the laws of our country," he said.

Resource-rich Zimbabwe has the world's second largest known platinum reserves after neighboring South Africa and also has lucrative gold and diamond deposits.

Foreign miners operating there include Anglo American Platinum (AMSJ.J), the world No. 1 producer of the precious metal, Rio Tinto (RIO.AX) (RIO.L) and Mwana Africa (MWA.L).

(Editing by Matthew Tostevin)