Impala Platinum has agreed to a US$971 million deal with the Harare government that will see the company transfer a 51% stake to black Zimbabweans.
The deal, signed in Harare on Friday, puts the world’s second largest producer of platinum in compliance with the controversial indigenisation law president Robert Mugabe signed in 2010.
The law requires foreign-owned companies to cede at least 51% ownership to black Zimbabweans.
In a statement released Friday, Impala said it was “pleased to conclude what is known as a non-binding term sheet … with the government of Zimbabwe.”
A term sheet is a financial document that spells out details of a transfer in ownership, including price, and whether the transfer is made in cash, stock or debt.
A term sheet is typically not legally binding. In this case, Zimplats Holdings will retain 49% ownership of Zimplats.
Impala chief executive Terence Goodlace said the agreement underlines the company’s commitment to what it called good corporate citizenship and lays the foundation for a Zimbabwean platinum mining company capable of attracting investment needed to deliver future benefits to shareholders.
Indigenization minister Saviour Kasukuwere told VOA that the nearly US$1 billion deal is significant for the country.
Critics of the indigenization policy accuse the government of using coercion to wrestle shares from foreign companies.
Chief economist Prosper Chitambara of the Labour and Economic Development Research Institute of Zimbabwe said given the substantial value of the company, Zimplats likely did not hand over 51 percent of the company willingly.