News / Africa

Platinum Giant Cedes Majority Stake in Zimbabwe

Zimbabwean President Robert Mugabe opens the country's Parliament  in Harare, October 30, 2012.
Zimbabwean President Robert Mugabe opens the country's Parliament in Harare, October 30, 2012.
The world’s largest producer of platinum has bowed to pressure to cede 51 percent of its mining operations in Zimbabwe to local black concerns - under President’s Mugabe’s controversial indigenization policy. 

The Anglo American Platinum announcement comes as the company struggles with wildcat strikes in South Africa.  Zimbabwe, meanwhile, is stalled in getting financial support from the International Monetary Fund (IMF), due in part to concerns that the indigenization policy chases away much-needed foreign investment. 

Indigenization law

Anglo American became the second mining giant to comply with the indigenization law requiring all foreign-owned companies to transfer a majority stake of their Zimbabwe operations to local blacks.  The law is aimed at what the government says is addressing racial inequalities lingering from white colonial rule.

Anglo American Platinum executive in Zimbabwe, July Ndlovu, says he hopes surrendering the company's majority stake will benefit Zimbabweans.

"It has not been easy.  We have argued a lot, but we engaged in this process with only one single purpose in mind: which was to find a transaction which is value credited and beneficial to all parties and can ensure a sustainable mining investment in this country," said Ndlovu.

The deal calls for a 51 percent transfer of Anglo’s Unki mine - worth more than $140 million - to a state fund, mine employees, a community trust and unnamed local investors.

Earlier this year, Impala Platinum became the first mining concern to transfer 51 percent of its Zimbabwe operation Zimplats to local black interests under the same law.

Disincentive to investors

Zimbabwe has some of the world's largest known platinum deposits and the transfers are seen by President Robert Mugabe’s ZANU-PF party as a financial windfall in the cash strapped country.

But coalition partner Prime Minister Morgan Tsvangirai, his MDC party and many economists disagree - saying the indigenization policy is a disincentive for continued and new foreign investment.

It also appears to be a major obstacle in getting IMF and World Bank loans.  The IMF did relax restrictions on technical assistance to Zimbabwe earlier this week - but that does not translate into funding, says analyst John Robertson from Robertson Economic Information Services.

"The government has been crying for money and this is not money.  This is advice.  If we follow the advice we may qualify for financial assistance," he said.

But Zimbabwe's Empowerment and Indigenization Minister Saviour Kasukuwere argues indigenization is actually creating a sustainable mining investment in Zimbabwe - and those that see it any other way need not invest in the African country. 

“This policy has been extensively debated.  If major, those major, investors can accept that this policy gives them a fair return, to then say [it] scares away investors - if there are investors who do not want - must stay in their own countries," said Kasukuwere.

It remains to be seen if Anglo American will reap a fair return in Zimbabwe after giving up its majority stake and it is not clear if the move is related to its recent troubles in South Africa.

The platinum giant has been facing illegal strikes since mid-September in spiraling labor actions across much of the mining sector.   Some 12,000 platinum miners have yet to return to work at mines outside of Johannesburg.  The company says production is down by 3,694 ounces of platinum - or $5.7 million - per day. So far losses have amounted to nearly a quarter of a billion dollars in about six weeks.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Christmas Gains Popularity in Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid