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

Syrian Rebels Poised for Anti-Russia Collaboration

Forty-one insurgent groups issue joint statement vowing retaliation for Russian air offensives More

Political Maneuver Revives Export-Import Bank's Chances

Parliamentary tactic gets bill out of committee, but it faces opposition in the Senate More

Beijing Warns US on S. China Sea Patrols

Warning follows news reports Thursday that US military is planning to sail warships close to artificial islands Beijing has been aggressively building More

This forum has been closed.
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.
House Republicans in Chaos as Speaker Favorite Withdrawsi
Jim Malone
October 09, 2015 12:32 AM
The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video House Republicans in Chaos as Speaker Favorite Withdraws

The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video German, US Officials Investigate Volkswagen

German officials have taken steps to restore some of the reputation their car industry has lost after a recent Volkswagen diesel emissions scandal. Authorities have searched Volkswagen headquarters and other locations in an effort to identify the culprits in the creation of software that helps cheat on emission tests. Meanwhile, a group of lawmakers in Washington held a hearing to get to the bottom of the cheating strategy that was first discovered in the United States. Zlatica Hoke reports.

Video Why Are Gun Laws So Hard for Congress to Tackle?

Since taking office, President Barack Obama has spoken out or issued statements about 15 mass shootings. The most recent shooting, in which 10 people were killed at a community college, sparked outrage over the nation's gun laws. But changing those laws isn't as easy as many think. VOA's Carolyn Presutti reports.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

VOA Blogs