News / Africa

Zimbabwe Mining Law Boosts Black Ownership

Zimbabwe President Robert Mugabe (file photo)
Zimbabwe President Robert Mugabe (file photo)
Peta Thornycroft

Zimbabwe's new mining regulations are requiring companies to come up with a plan by May 9 to surrender a 51 percent stake in their shares to black Zimbabweans within the next six months.  The shares will be paid for by the value of the minerals underground.

Some Zimbabweans fear that changing the mining laws will decimate the mining industry, much like the collapse in the commercial agriculture industry after President Robert Mugabe began seizing land from more than 4,000 white farmers in 2000.

President Robert Mugabe said recently Zimbabwe will not only take white-owned land but mining assets as well.

Speaking recently in Shona at the burial of a senior ZANU-PF official, he said Zimbabweans would get a share of major mining companies such as Lonrho, Anglo American and Rio Tinto.

New laws mean black Zimbabweans must own a majority in all mining companies including undeveloped sites where individuals and companies have concessions on unexplored land.

Zimbabwe's mining sector is expected to earn at least $1 billion annually, most of it from platinum, gold and diamonds. Zimbabwe also has rich coal and chrome deposits.

Indigenization Minister Saviours Kasukuwere, is a member of Mugabe’s ZANU-PF party. His ministry wrote the new regulations. Under the new regulations, all foreign-owned companies with a net asset value of $1 would have to sell controlling stakes to indigenous Zimbabweans by September 25. This is a change from a net asset value of $500,000 last year and the value was changed to include undeveloped concessions.

This means that majority shares in any every foreign-owned mining firm should be sold to designated entities as they are referred to in the new law. There are fears that "designated" means ZANU-PF officials or supporters.

Kasukuwere said his door is open to mining personnel who wanted to talk to him about their operations or future investments.

"These resources belong to us as Zimbabweans," said Kasukuwere. "Our mineral resources are what oil is to Saudi Arabia. This is a business decision. This is the law of the land. Business communities, those who are affected, let us have a chat."

He said that the government was open to suggestions that would help Zimbabwe work towards a new, profitable mining policy.

"Once we legislate once we have come up with a position we have not closed our doors with those business people who have the interests of the country at heart," said Kasukuwere. "How do we structure so that there is that partnerships that win-win?"

South African mineral governance consultant Paul Jourdan said majority ownership of mines could be problematic if the shares were simply transferred to entrepreneurs.

"The indigenous entrepreneur is obviously going to put that in his or her bank account and the earnings from that equity will not go to the people as a whole," said Jourdan.

He said a better method of awarding indigenous shareholding in mining assets or mining companies was by auction.

"The best way of dealing with mineral resources is to delineate all the known areas, where there are known resources, and then to put them out to public tender and to have transparent, competitive  tenders, where the bids would be against the developmental goals," said Jourdan.

He said established, rich mining companies would likely be able to afford the new 51 percent ownership laws but as all developers needed a fair return on their investment the law would “sterilize” medium to marginal mining companies which would probably not find new investors.

Veteran Zimbabwe economist John Robertson is highly critical of the new mining laws and said the regulations would frighten off both new investors and established companies wanting to expand.

"It costs money  to do further exploration," said Robertson. "The underlying instability comes from these policies, these policy choices have generated the instability."

Robertson says most mining companies are too nervous to talk to the media in any detail about the new ownership law. Several lawyers say several clauses in the new laws on indigenization are carelessly drafted and contradictory.

You May Like

India PM Modi's Party Distances Itself From Religious Conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote Hindu-dominant agenda by luring Muslims and Christians to convert More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

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