HARARE (Reuters) - Impala Platinum (IMPJ.J), the world’s second-largest platinum miner, has agreed to sell a majority stake in its Zimbabwe unit to local black investors for $971 million to meet black ownership targets set by President Robert Mugabe.
The deal, which will see the Zimplats (ZIM.AX) unit lend the money needed to buy the stake, is Zimbabwe’s largest local ownership transaction and a major scalp for Mugabe’s controversial black economic empowerment push, the centerpiece of his campaign for re-election in polls due this year.
The 88-year-old, who has been in power since independence in 1980, says the local ownership policy - as with the seizure of white-owned commercial farms since 2000 - is meant to redress colonial imbalances. His critics dismiss it as populism by his ZANU-PF party in the run-up to the elections.
“The transaction being concluded today is a flagship of the policy objectives of our government’s empowerment of indigenous Zimbabweans,” Saviour Kasukuwere, the minister leading the push, said at a signing ceremony.
Kasukuwere said the transaction was proof that ordinary Zimbabweans and not those close to Mugabe were benefiting.
Under the deal, Implats will transfer 51 percent of Zimplats to Zimbabwean investors as follows: 10 percent to the community, 10 percent to Zimplats employees and 31 percent to the state-controlled National Indigenisation and Economic Empowerment Fund.
The fund, which officials say has $2 billion of assets, is headed by a former general and administered by Kasukuwere, a senior official in Mugabe’s ZANU-PF party.
Prime Minister Morgan Tsvangirai’s MDC party, which joined ZANU-PF in a power-sharing government in 2009, has been arguing that the fund - a rough equivalent of a sovereign wealth fund - should be housed under the finance ministry.
Zimplats will provide a loan to the new shareholders at annual interest of 10 percent. The debt is to be repaid through dividends over 10 years while management of Zimplats will remain with the company, Impala said.
Implats chief executive Terence Goodlace said the company had confidence in Zimbabwe and was committed to a $460 million expansion of Zimplats’ operations.
“I am, during these uncertain economic times, excited about the future of Zimplats and platinum mining in Zimbabwe,” he said. “The uncertainty that has dogged Zimplats during the negotiations is now hopefully a thing of the past.”
“ELEPHANT IN THE ROOM”
Zimplats said in March it had agreed to sell the stake to locals, and has been hammering out the terms of the deal since then. The transaction should be wrapped up by the end of June, and looks likely to lead to other mining firms concluding deals.
“This was the elephant in the room. After this everyone will fall into line,” a local banker who structured the deal said.
Last month, Implats and Aquarius AQP.AX signed another deal to sell 51 percent of shares in their Mimosa joint venture to comply with the black empowerment law in a transaction worth $550 million.
Anglo American Platinum (AMSJ.J), the world’s largest producer of the metal, also agreed to transfer a majority stake in its Unki mine to locals in a $142.8 million deal last November.
Zimbabwe has the largest known platinum deposits after neighboring South Africa although the 51 percent local ownership law has taken the shine off the country as an investment destination.
Kasukuwere is also leading a push to force banks to comply with the ownership laws, and said at the ceremony that foreign banks would not be spared.
Additional reporting by MacDonald Dzirutwe and David Dolan in Johannesburg; Editing by Ed Cropley and Mark Potter