Proposals afoot in the Zimbabwean government to demand a 51% "indigenous" stake in mining firms including platinum producer Zimplats are sitting poorly with investors in South Africa's Impala Platinum Holdings Limited, or Implats, its majority owner.
Implats shares declined 6.2% in value Monday on the Johannesburg Stock Exchange after Zimbabwean Minister of Mines Amos Midzi told reporters that the government intended to amend its mining laws to allow it to take control of some mines.
"The government wants to be an active participant in the mining business," Midzi said. He told journalists that the mining law amendments, which could be passed by July by the ruling ZANU-PF party's majority in parliament, would allow the government to take a 25% stake immediately without compensation, and buy in for up to 51% of equity.
Zimplats managers have disclosed plans to sink some US$2 billion into operations in Zimbabwe over the next 18 years to expand platinum production – but that is unlikely to happen if Harare passes the controversial legislation for effective nationalization.
Reporter Patience Rusere of VOA's Studio 7 for Zimbabwe asked platinum analyst Henk de Hoop of the Johannesburg brokerage house Barnard Jacobs Mellet about the market's perspective on Harare's plans for black empowerment in mining.
She also sought the viewsof economist Eric Bloch, a member of the Reserve Bank of Zimbabwe's board of advisors, on the proposed “indigenization” of mining firms.
Bloch said that based on the performance of Zimbabwe's state-controlled companies, a mining sector takeover by the government is not a very good idea.