HARARE – Zimbabwe Platinum Mines Limited (Zimplats) says it now feels secure to continue operations in the country after complying with the indigenisation law.
The miner said the compliance restored certainty.
The future of country’s largest platinum producer had been bleak following rejection of its initial indigenisation proposal by government.
Last Friday, Zimplats was indigenised, giving up 51 percent shareholding in a $971 million deal.
Terence Goodlace, chief executive of Impala Platinum Holdings (Implats) — which held an 84 percent stake in Zimplats — said the “company now feels secure to continue operations in the country.”
“We have completed what possibly ranks as the largest ever empowerment transaction in Zimbabwe,” said Goodlace.
Implats had committed to a multi-million dollar Ngezi Phase 2 expansion project, expected to boost platinum production of the Zimbabwe operation, but had been delaying implementation due to “uncertainty” surrounding its future.
In 2011, Indigenisation minister Saviour Kasukuwere threatened to cancel Zimplats’ mining licence, accusing the platinum group metals producer of defying the empowerment law by offering ‘‘unacceptable plans.”
“We have taken the position to deem them (Zimplats) non-compliant in terms of provisions of the Indigenisation Act. We will now contact the Mines ministry with a view to initiate the process to revoke the operating licence of Zimplats,” Kasukuwere was quoted as saying then.
The Australian Stock Exchange-listed mining giant last year signed an “in principle agreement” to transfer 51 percent shares to black Zimbabweans. Zimplats, however, submitted a revised compliance plan to the government late last year, giving provision for the payment of its proposals.
Kasukuwere and Goodlace last week signed a term sheet or agreement — outlining the implementation of Zimplats’ enhanced empowerment plan — which will see the company vendor-financing the acquisition of the 51 percent shareholding by locals.
Under the indigenisation deal, 31 percent was issued to National Indigenisation and Economic Empowerment Board (Nieeb)’s fund, 10 percent to employees and the other 10 percent was given to Ngezi-Zvimba Community Share Ownership Trust.
Zimplats has a market value of approximately $1 billion.
While analysts argue Zimbabwe’s indigenisation programme has scared away investors, Kasukuwere said compliance by all the major mining companies operating in the country “displayed the remarkable investor confidence in Zimbabwe, as some companies have committed to expanding their operations after compliance with the empowerment policy.” – Business Writer