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

Hezbollah Chief Says Does Not Want War But Ready for One

VOA's Jerusalem correspondent reports that with an Israeli election looming and Hezbollah's involvement in Syria, neither side appears interested in a wider conflict More

Multimedia VOA SPECIAL REPORT: Despite Danger, Best US Minds Battle Deadly Virus

Scientists at America's premier biological research center race in military confinement to find effective drugs, speedier tests and a safe vaccine amid the deadliest outbreak of Ebola in history More

Kurdish Poet Battles to Defend Language, Culture

Kawa Nemir's work is an example of what he sees as an irreversible cultural and political assertiveness among Kurds in Turkey 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.
Egypt's Suez Canal Dreams Tempered by Continued Unresti
X
Heather Murdock
January 30, 2015 8:00 PM
Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Mobile Infrared Scanners May Help Homeowners Save Energy

Mobile photo scanners have been successfully employed for navigational purposes, such as Google Maps. Now, a group of scientists from the Massachusetts Institute of Technology says the same technology could help homeowners better insulate their houses and save some money. VOA’s George Putic has more.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid