Accessibility links

Zimbabwe Minister Moves to Reassure Mine Investors on Indigenization


Mpofu said the the government was currently engaged in negotiation with some companies over the local ownership or indigenization quotas but would not cancel any licenses during that process

Zimbabwean Minister of Mines Obert Mpofu assured foreign mining companies on Wednesday that he had “no intention” of suspending or revoking licenses of firms now in negotiations with the Ministry of Indigenization over the transfer of controlling stakes in such enterprises to black Zimbabwean investors on terms that remain unclear.

In remarks that offered some relief to the mining sector, Mpofu said the the government was currently engaged in negotiation with some companies over the local ownership or indigenization quotas but would not cancel any licenses during that process.

"We have no intention of canceling any license," said Mpofu.

"There are negotiations taking place with some parties but no license has been canceled. We have no such intention," the minister said.

Mpofu told the VOA Studio 7 LiveTalk program that Indigenization Minister Saviour Kasukuwere, who is spearheading the black ownership program, did not mean to scare investors by insisting foreign mining concerns comply with the law.

Kasukuwere also tempered his rhetoric in addressed the conference, saying exceptions could be made to the indigenization laws requiring foreign miners to give majority stakes to locals, hinting at a compromise for less than the 51 percent stake demanded.

"With the mining industry, we've had our running battles, but we've made tremendous progress," said Kasukuwere "Where there are exceptional circumstances, we'll look at those circumstances in a manner that allows our country to move forward."

Finance Minister Tendai Biti and Planning and Investment Minister Tapiwa Mashakada, also attempted to assuage fears among investors of thinly disguised nationalization.

Despite the reservations of mining executives and investors, the threat of indigenization does not appear to have weighed heavily on capital inflows in the sector.

Zimbabwe Chamber of Mines President Winston Chitando told the conference mining projects worth $260 million were approved in the first quarter of this year, three times the amount seen in the year-ago period. In the first six months of 2011, total investment in mining came to $941 million compared with $131 million in 2010.

In an interview, Mpofu said this showed the importance of mining to Zimbabwe, and why licenses would not be suspended or revoked during negotiations on indigenization.

Mpofu said Harare has no wish to throw the mining sector into chaos by suspending or revoking operating licenses, thereby putting thousands of Zimbabweans out of work.

Economic commentator Rejoice Ngwenya said the government charm offensive at the mining conference was well conducted, but may not allay fears amid foreign players in the sector that indigenization will eventually cost them most of their companies.

XS
SM
MD
LG