Business / Economy
Investors pulling out of deals due empowerment legislation
06 Jun 2011 at 10:02hrs | Views
HARARE -There has been reports that foreign investors are withdrawing offers to invest in mining firms in Zimbabwe because of concerns over President Robert Mugabe's controversial plan to transfer control of the mining sector to local blacks.
Rio Zim one of Zimbabwe's gold mining firms says some investors had shown keen appetite to invest in the firm during seven months of negotiations only withdrew recently due to the limitations on the equity stake imposed by the indigenisation and empowerment legislation.
Indigenisation Minister Saviour Kasukuwere, a hawkish ally of Mugabe who is spearheading the empowerment programme, has said the indigenisation campaign will begin with the mining sector, the bedrock of Zimbabwe's fragile economy.
Kasukuwere has given foreign owned mining firms until June 2 to submit details of how they plan to sell majority stake to local blacks by September, under the programme that he and Mugabe claim is necessary to ensure blacks benefit from the country's lucrative mineral resources.
But critics say the empowerment campaign is a ploy by Mugabe to seize thriving businesses and hand them over to his allies as a reward for support much in the same way that the veteran leader's land reforms were executed in the name of the people but benefited his top lieutenants the most.
Prime Minister Morgan Tsvangirai, who says he is for genuine indigenisation of the economy that benefits ordinary Zimbabweans, has castigated Mugabe's empowerment drive as "looting by a greedy elite".
Besides Rio Zim, other big mining firms under pressure to sell controlling stake to local blacks include the country's largest platinum miner Zimplats, owned by Impala Platinum (Implats), the world's second largest producer of the metal used in the automotive industry.
Mwana Africa, which owns Bindura Nickel Mine and Freda Rebecca gold mine and Zimbabwe's largest gold miner Metallon Gold Zimbabwe are also some of the companies being targeted by the empowerment drive.
Rio Zim one of Zimbabwe's gold mining firms says some investors had shown keen appetite to invest in the firm during seven months of negotiations only withdrew recently due to the limitations on the equity stake imposed by the indigenisation and empowerment legislation.
Indigenisation Minister Saviour Kasukuwere, a hawkish ally of Mugabe who is spearheading the empowerment programme, has said the indigenisation campaign will begin with the mining sector, the bedrock of Zimbabwe's fragile economy.
Kasukuwere has given foreign owned mining firms until June 2 to submit details of how they plan to sell majority stake to local blacks by September, under the programme that he and Mugabe claim is necessary to ensure blacks benefit from the country's lucrative mineral resources.
But critics say the empowerment campaign is a ploy by Mugabe to seize thriving businesses and hand them over to his allies as a reward for support much in the same way that the veteran leader's land reforms were executed in the name of the people but benefited his top lieutenants the most.
Prime Minister Morgan Tsvangirai, who says he is for genuine indigenisation of the economy that benefits ordinary Zimbabweans, has castigated Mugabe's empowerment drive as "looting by a greedy elite".
Besides Rio Zim, other big mining firms under pressure to sell controlling stake to local blacks include the country's largest platinum miner Zimplats, owned by Impala Platinum (Implats), the world's second largest producer of the metal used in the automotive industry.
Mwana Africa, which owns Bindura Nickel Mine and Freda Rebecca gold mine and Zimbabwe's largest gold miner Metallon Gold Zimbabwe are also some of the companies being targeted by the empowerment drive.
Source - TNZ
