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March 5, 2013 12:35 pm
Zimplats, Zimbabwe’s largest platinum producer by volume, on Tuesday said the government intended to acquire compulsorily land covering about half of its mining claims in the southern African country.
The move by Harare comes hot on the heels of a tortuous and often acrimonious indigenisation programme driven by President Robert Mugabe’s Zanu-PF party, which eventually led to Zimplats’ agreeing to sell 51 per cent of its shares to “indigenous entities” for $971m.
A government notice dated March 1 said the “president intends to acquire compulsorily part of the land held” by Zimplats, which is majority owned by Impala Platinum, for the “utilisation of such mining location [sic] for the benefit of the public”.
Implats said that the land amounted to about 28,000 hectares of Zimplats’ mining claims but did not include areas where the company is currently mining and so existing operations would not be affected.
But if the land was acquired it would impact on Zimplats’ ability to develop new mines and fuel concerns about the government’s policies towards mining companies and foreign investors.
The mining company has 30 days to lodge an objection to the government move. It could also submit a claim for compensation, the government notice said.
Implats said: “Implats and Zimplats are taking legal advice in order to protect their rights and, in addition, remain in consultation with the relevant government authorities.”
The government and foreign mining companies have been at loggerheads for years over the government’s indigenisation programme.
Under Zimplats’ deal to sell a 51 per cent stake, 10 per cent is to be bought by a community trust; another 10 per cent is to go to an employee share ownership trust; and 31 per cent is to be acquired by the state-owned National Indigenisation and Economic Empowerment Fund.
The indigenisation programme exacerbated investment uncertainty and was seen to be motivated in large part by politics as the country gears up for elections this year. It also applies to foreign-owned banks in the country, including Barclays, Standard Chartered and Standard Bank, as well as firms such as BAT and Nestlé.
The policy was pushed by the Zanu-PF party, which drove the notorious land-seizure programme that began in 2000 and triggered a decade of economic chaos in Zimbabwe.
After violent and disputed elections in 2008, a unity government was formed and the economy abandoned its local currency for the US dollar, which brought a measure of stability.
But uncertainty has returned as Zimbabweans are expected to return to the polls this year in elections that will be critical to Zanu-PF, which faces a challenge from the Movement for Democratic Change, its main partner in the dysfunctional unity government.
Zimbabweans will vote in a referendum on a new constitution on March 16, which should clear the way for national elections.
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