Johannesburg - President Robert Mugabe’s government plans to seize control of foreign-owned mines without paying for them as part of a program to accumulate $7 billion of assets following his July 31 election victory, a minister said.
The government will compensate bank owners as it takes control of their companies, Saviour Kasukuwere, the minister in charge of the program to compel foreign companies to cede 51 percent of their assets to black investors or the government, said in an interview in Harare, the capital, today.
His comments echo a suggestion made by Mugabe earlier this year.
“When it comes to natural resources, Zimbabwe will not pay for her resources,” Kasukuwere said.
“If they don’t want follow the law that’s their problem.” Non-compliant mine owners risk losing their licenses, he said.
Anglo American Platinum Ltd., Impala Platinum Holdings Ltd., Barclays Plc and Standard Chartered Plc are among companies that operate in the country.
Other industries may have to yield smaller stakes to black owners, Kasukuwere said.
Metals and minerals, including platinum and gold, accounted for 71 percent, or $719.9 million, in exports in the first four months of this year, the state-controlled Herald newspaper said, citing the finance ministry.
The government and black Zimbabweans will take half of the value of assets it has identified in the economy, he said.
The state empowerment fund has so far acquired about $1 billion in assets, he said.
New Bourse
The government will open a new stock exchange to trade the black-owned stakes in the companies, he said.
Trading at the Harare Stock Exchange, which would rival the Zimbabwe Stock Exchange, may start within 100 days of the new government taking office and will only be open to black Zimbabweans, he said.
Investments in Zimbabwe will be protected by the government as long as companies do not seek to exploit the country without its people benefiting, Kasukuwere said.
“We want to welcome investors, as long as it’s in partnership with our people,” he said.
“It’s a logical economic plan that has been put forward by our party for Zimbabweans to achieve greater benefits from their resources. Forty-nine percent is a huge part of the cake.”
Plunging Shares
The main index on the Zimbabwe Stock Exchange fell 2.2 percent today, adding to yesterday’s 11 percent decline.
Most banks in the country have stopped issuing new loans because of concern over policy, two chief executive officers said yesterday, declining to be identified because they didn’t want to anger the government.
Mugabe’s victory was announced on August 3 by the Zimbabwe Electoral Commission.
“Over the next five years Zimbabwe is going to witness a unique wealth-transfer model that will see ordinary people taking control of the economy,” Mugabe’s Zimbabwe African National Union-Patriotic Front said in a statement handed to reporters in Harare today.
The measures will stymie investment, said Michael Kavanagh, an analyst at Noah Capital Markets in Cape Town.
“To what extent does the Zimbabwe government interfere with operations? To what extent does it try to extract cash from those operations? Does it contribute its share of capital,” he said in an interview.
“At this stage it doesn’t look to me like the Zimbabwean government has any intention of being reasonable.” - Bloomberg News