ZIMPLATS, the biggest platinum producer in Zimbabwe, is in talks to resolve Harare’s demand for the company to cede a 29.5 percent stake to the state.
Patrick Shayawabaya, the chief financial officer at Zimplats, said the subsidiary of JSE-listed Impala Platinum (Implats) was optimistic that “a mutually beneficial outcome will be achieved”. He spoke during a Zimbabwe-funded trade conference held in Johannesburg yesterday.
Zimbabwe, which has the biggest deposits of platinum after South Africa, introduced an indigenisation policy in 2008 under which all foreign-owned companies are expected to give 51 percent ownership to locals.
Savior Kasukuwere, Zimbabwe’s Indigenisation Minister, had warned the company to transfer the stake or the “enforcement mechanisms will be activated”, Bloomberg reported.
The Zimbabwe indigenisation ministry has rejected the plans tabled by Implats and Aquarius Platinum.
However, fresh confusion was sown yesterday when Prime Minister Morgan Tsvangirai said at the conference that the indigenisation policy was merely rhetoric.
“You can’t nationalise investments, you can’t grab property – that is very clear,” Tsvangirai said.
The Zimbabwe government has demanded that Implats give 29.5 percent of Zimplats to the National Indigenisation and Economic Empowerment Fund by March 7.
A planned expansion programme at Zimplats aims to increase capacity to 270 000 platinum ounces a year by 2014. The budget for the upgrade increased to R840 million last year from R698m in 2010.
Shayawabaya said there was potential to grow production beyond 270 000 ounces of platinum at Zimplats, if only the investment climate was conducive for investors.
“The expansion projects are funded from internal cash flows. We are not able to raise money in Zimbabwe. The key is to raise money offshore.”
Mining is the backbone of the Zimbabwean economy, contributing 27 percent of gross domestic product.
John Chikombero, the Zimbabwe Chamber of Mines chief executive, who was also at the investment conference, said the country could not afford not to invest in mining.
Its other chief resources are gold, chrome, nickel, copper and diamonds.
Tendai Biti, the Minister of Finance, said the aim of the conference was to bridge the gap between the investment opportunities and negative investor confidence. – Dineo Faku