September 14, 2011 / 9:30 AM / 7 years ago

UPDATE 2-Zimbabwe softens tone with foreign miners

 * Talks ongoing with companies
 * Government ministers tone down comments
 * No licences cancelled
 * Investors still left in the dark

 (Recasts throughout)	
 By Nelson Banya and MacDonald Dzirutwe	
 HARARE, Sept 14 (Reuters) - Zimbabwe ministers said the
country would not suspend any mining permits and that exceptions
may be made to laws requiring foreign miners to give majority
stakes to locals, bringing relief but no clarity to a policy
that has alarmed investors.	
 The remarks by the mines minister and the empowerment
minister at a mining conference come after most foreign
operators appear to have bowed to government pressure on the
issue, though details of deals struck remain clouded.	
 The recent empowerment law, signed in 2008, requires foreign
miners to transfer 51 percent equity stakes in local entities to
black investors. In August several companies received letters
directing them to submit new plans within 14 days or risk losing
their licences. 	
 Mines Minister Obert Mpofu told the conference in Harare
that the government did not intend to cancel any permits.	
 "We have no intention of cancelling any licences. There are
some negotiations taking place with some parties. No licence has
been cancelled. We have no such intention," he said.	
 While investors in the country with world's second-largest
platinum reserves may welcome the comments, the abrupt change in
tone will keep them guessing and reinforces the impression that
the policy has been ad-hoc and based on brinkmanship.	
 Companies that have felt the heat have included Zimplats
 , 87 percent-owned by Impala Platinum , the
world's second-largest platinum producer, and Canada's Caledonia
Mining Corporation .	
 Both have so far survived threats to have their mining
licences revoked for failure to comply with the new ownership
 The charm offensive was maintained by Empowerment Minister
Saviour Kasukuwere, who has been the face of the mine ownership
drive by President Robert Mugabe's ZANU-PF Party.	
 "With the mining industry, we've had our running battles,
but now we've made tremendous progress," he said.	
 "When there are exceptional circumstances, we'll look at
those circumstances in a manner that allows our country to move
forward. We are aware of the capital requirements in mining; we
are alive to those realities," he told the conference.	
 Analysts have maintained that those "capital requirements"
could force the government's hand. Impoverished Zimbabwe simply
has no money, private or public, to buy majority stakes in
mining operations, nor the cash to keep them running.	
 Companies have said they will not get a viable return on
their investments in Zimbabwe if they do not have majority
stakes. The chief executive of Implats said in August that "51
percent equity just does not work". 	
  Analysts also see the law as a way for Mugabe's ZANU-PF
party to get badly needed funds ahead of elections scheduled for
next year.	
 The stakes are extremely high. Zimplats, for example,
accounts for about 10 percent of Implats' roughly 1.8 million
ounces of platinum production per year.	
 (Writing by Ed Stoddard, editing by Jane Baird)	
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below