Business / Economy
Zimbabwe rejects all 175 empowerment proposals from foreign mines
20 Jul 2011 at 12:20hrs | Views
Saviour Kasukuwere, Zimbabwe's Minister for Indigenisation and Economic Empowerment, has revealed that they have rejected all 175 empowerment proposals they received from foreign mining companies and will kick out any firms that don't meet its laws on local ownership by September.
This was revealed at today's one-day Indigenisation Indaba which is being held at the Harare International Conference Centre.
Foreign miners operating in Zimbabwe must sell majority stakes to local black investors by September, or face losing their assets.
"We have received 175 proposals from mining companies and we've turned down all of them. The proposals were that 26% would be done through social credits and 25% direct equity," Minister Kasukuwere told the conference in Harare.
"By the end of September, any mining company that doesn't comply with the law, we'll kick them out. We'll ask them to hand over their assets to government."
Kasukuwere's comments could be a sign the government is unwilling to settle for anything less than majority direct ownership by locals.
He has previously said the Zimbabwe government would not pay any money for the mining stakes but would base any payment negotiations on the state's ownership of the country's untapped mineral wealth.
The controversial Indigenisation and Economic Empowerment Act issued last year, required all foreign firms valued at more than $500, 000 to sell 51 percent stakes to locals.
The new rules published without warning on Monday expand the law to include all mining companies valued at more than one dollar.
"A controlling interest, or the 51 percent of the shares or interest which in terms of the Act is required to be held by indigenous Zimbabweans in non-indigenous mining business," the new law said in the government gazette.
Companies are expected to complete their sale plans by May 9 and transactions must be finalised by September 25, according to the gazette.
"It's very messy and it is a harsher approach to the mining sector," economist John Robertson once told AFP.
"It is politically inspired. The disposal of 51 percent of the shares in mining companies to indigenous Zimbabweans will apply to all companies with a net asset value of more than one US dollar," said Robertson.
The law is strongly supported by President Robert Mugabe and his Prime Minister Morgan Tsvangirai.
Tsvangirai voiced his support for the law when he said "Indigenisation is not about expropriation or nationalisation ... it's about setting fair value," at a debate at the World Economic Forum in Cape Town sometime this year.
Zimbabwe has been working to attract investors after a decade of political turmoil which has seen the collapse of its economy.
This was revealed at today's one-day Indigenisation Indaba which is being held at the Harare International Conference Centre.
Foreign miners operating in Zimbabwe must sell majority stakes to local black investors by September, or face losing their assets.
"We have received 175 proposals from mining companies and we've turned down all of them. The proposals were that 26% would be done through social credits and 25% direct equity," Minister Kasukuwere told the conference in Harare.
"By the end of September, any mining company that doesn't comply with the law, we'll kick them out. We'll ask them to hand over their assets to government."
Kasukuwere's comments could be a sign the government is unwilling to settle for anything less than majority direct ownership by locals.
He has previously said the Zimbabwe government would not pay any money for the mining stakes but would base any payment negotiations on the state's ownership of the country's untapped mineral wealth.
The controversial Indigenisation and Economic Empowerment Act issued last year, required all foreign firms valued at more than $500, 000 to sell 51 percent stakes to locals.
"A controlling interest, or the 51 percent of the shares or interest which in terms of the Act is required to be held by indigenous Zimbabweans in non-indigenous mining business," the new law said in the government gazette.
Companies are expected to complete their sale plans by May 9 and transactions must be finalised by September 25, according to the gazette.
"It's very messy and it is a harsher approach to the mining sector," economist John Robertson once told AFP.
"It is politically inspired. The disposal of 51 percent of the shares in mining companies to indigenous Zimbabweans will apply to all companies with a net asset value of more than one US dollar," said Robertson.
The law is strongly supported by President Robert Mugabe and his Prime Minister Morgan Tsvangirai.
Tsvangirai voiced his support for the law when he said "Indigenisation is not about expropriation or nationalisation ... it's about setting fair value," at a debate at the World Economic Forum in Cape Town sometime this year.
Zimbabwe has been working to attract investors after a decade of political turmoil which has seen the collapse of its economy.
Source - Byo24News
