Zimbabwe’s cash-strapped government will not pay any money for stakes in mining companies forced to sell majority holdings under new local ownership laws, said the minister overseeing the drive.
Instead, Harare will base any payment negotiations on the state’s ownership of the southern African country’s untapped mineral wealth, Youth and Indigenisation Minister Saviour Kasukuwere said. Zimbabwe is home to the world’s second-biggest platinum reserves.
“It’s not just about capital. There are substantive discussions that must be held,” he told Reuters on the sidelines of a World Economic Forum event in Cape Town, Reuters reports.
“The state has a stake in any mining entity in the country in any case because the resource belongs to the state. That has to be taken into account.”
Kasukuwere’s comments are the latest twist in a convoluted push to spread Zimbabwe’s mineral wealth among local blacks and are likely to alarm mining companies who have until the end of September to transfer 51 percent stakes.
Although individuals are able to buy holdings, Kasukuwere said in March the government was setting up a sovereign wealth fund as a takeover vehicle, effectively turning the local-ownership drive into nationalisation.
Analysts said at the time Harare appeared to be using the threats to force global mining groups into paying more in mineral royalties.
However, the March publication of laws demanding ownership transfer within six months raised the stakes and hit the shares of platinum miners such as Impala Platinum, the world’s second-biggest producer of the precious metal.
London- and Johannesburg-listed Aquarius Platinum and Anglo Platinum also have operations in the country.
“Obviously the mining companies are not going to be happy with this after putting a lot of money into their operations,” said Tony Hawkins, professor of business studies at the University of Zimbabwe.
“But I don’t think it will work. It’s the same concept with the land reform where they said they will not pay for the land but for the improvements. I have a sense that they are making these policies up as they go. When they meet problems they will again change the policy.”
Mining companies operating in Zimbabwe face a May 9 deadline to say how they will transfer controlling stakes to local blacks.
Kasukuwere did not know how many had already complied, but said no exceptions would be made.
“All the companies who are affected are aware of the law and they will have to comply,” he said.
He also denied suggestions that a six-month transfer window was unrealistic. “It will be done, nicely,” he said.