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

Hostage Crisis Could Divide Japan Over Plans to Boost Military

Japanese Chief Cabinet Secretary Yoshihide Suga said Monday the government is working closely with the Jordanian government to secure the release of remaining Japanese hostage Kenji Goto More

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Country's youngest ever PM Alexis Tsipras, 40, sworn in Monday and says he will restore dignity to Greece by ending spending cuts More

Multimedia National Geographic Photo Camps Empower Youth

Annual mentoring program's mission is to give young people a voice to tell their own stories through photography 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.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

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