Underground at Mimosa
“’ one of the larger
mining operations
that is giving up 51%
of its shares to Zimbabwe
Harare, Zimbabwe — 05 April 2012 – The government of Zimbabwe has raised the stakes in its drive to wrest majority control of foreign mining companies, with the responsible minister saying the state now considered that it owned 51% of firms that have not complied with local ownership laws.

“All mining companies that have not complied should note that 51% of their shareholding is now deemed to be owned by the state,” empowerment minister Saviour Kasukuwere said.

Fin24 quoted Reuters as reporting that it was not immediately clear which firms were being targeted, or whether President Robert Mugabe’s cash-strapped government planned to pay for the shares. Kasukuwere did not respond to requests for clarification.

The demand for foreign companies, particularly miners, to transfer a 51% stake in local operations to black investors is widely seen as a tactic by Mugabe’s ZANU-PF party to raise cash for elections that may come this year, Fin 24 adds.

Johannesburg-listed Impala Platinum Holdings “’ the world’s second-biggest platinum producer “’ bowed to pressure last month to surrender half its Zimplats unit, although details of the transfer have not yet been worked out.

Analysts said this latest broadside from Kasukuwere might be more bluster than fact.
“I would treat this with quite a degree of scepticism,” said Nic Borain, an independent political analyst based in Cape Town.

“I would want to wait to see the specifics of how those shares would be transferred, how the assets would come to be in government hands, and how government would exercise any control over those assets.”

The government statement added that any profits accruing to the 51% stakes should be regarded as property of the state, and that other companies transacting with mining firms should remember that they are dealing with the government.

“Any attempt to defraud the state will result in prosecution,” it added.

Kasukuwere has previously said most major firms have complied or are in the process of complying, but he has not publicly endorsed plans relating to unlisted South African miner and leading gold producer Metallon Gold, and Mwana Africa’s Bindura Nickel corporation.

Harare says its indigenisation policy is needed to redress the racial inequities of past colonial rule, but similar drives in other sectors have been disasters, most notably the government’s seizure of white-owned farmland that decimated commercial agriculture and led to widespread food shortages.

Source: Reuters Africa through Fin24. For more information click here.