Harare, Zimbabwe — 13 May 2013 – The Chamber of Mines of Zimbabwe (CMZ) holds its annual general meeting this week as the country’s focus shifts to the capital intensive sector ahead of the forthcoming general elections.
Already pressure is piling on companies to fund polls after finance minister Tendai Biti hinted on introducing a new tax to fund the polls, reports independent Zimbabwean daily “News Day”. This also comes at a time when large foreign-owned mining firms are yet to reach consensus with the government on the implementation of the indigenisation policy.
The mining sector, which according to latest government figures, accounts for 68% of total mineral exports, is expected by government to soon engage in value addition amid concerns that treasury could be losing millions of dollars each year.
The CMZ’s 74th annual general meeting is set for May 16 to18 under the theme “Where to from here: Managing and developing the mineral wealth of Zimbabwe tomorrow.”
Mining firms such as Mimosa and Zimplats are yet to reach consensus on indigenisation transactions with government, despite partially complying with the empowerment regulations. Mimosa, in its trading update for the first quarter, said it had partially complied with the government policy, but there was little progress in implementation.
Mimosa in December came up with a sale consideration for 51% of Mimosa Holdings to indigenous parties of US$550 million attributable to Aquarius, based on an agreed fair market value for Mimosa Holdings of US$1.078 billion.
Under the transaction, Mimosa would provide a vendor loan funding mechanism to facilitate the transaction for 10 years and bear interest of 9% annually, and would be settled through waiver of the right to receive 90% of dividends due to indigenous parties.
Zimplats, the largest platinum miner, on the other hand could be on the brink of losing a huge part of its mining ground after government announced a compulsory acquisition of the property.
The mining sector is also facing viability problems that include unavailability of working capital, old equipment and low investments.
Minister of mines and mining development Obert Mpofu would be the key speaker at the meeting, and other speakers include World Bank chief economist for Zimbabwe Nadia Piffarreti, South African mineral economist Paul Jordan and CMZ president Winston Chitando.
The finance ministry in the 2013 national budget said that mineral exports had risen by 230% over the 2009-2011 period, making mining the leading export sector. The ministry stated that the average share of mining to Gross Domestic Product had grown to an average of 16,9% from 2009- 2011, overtaking agriculture.
Source: News Day. For more information, click here.