HomeBusiness DigestMugabe endorses Midzi's mines takeover proposal

Mugabe endorses Midzi’s mines takeover proposal

Shakeman Mugari

PRESIDENT Robert Mugabe this week all but gave a ringing endorsement to Mines minister Amos Midzi’s proposal to nationalise the mining sector

despite cabinet pressure to censure him.

Mugabe also threw his wait behind central bank governor Gideon Gono for his policies, which have brought him into conflict with Finance minister Herbert Murerwa.

Murerwa has accused Gono of meddling in fiscal policies which fall directly under his ministry.

Analysts say Mugabe’s statements on the RBZ could be an indication of his support for Gono.

Mugabe applauded the central bank for keeping the economy afloat under difficult times.

The central bank has been printing trillions to fund government’s expenditure, blamed for triggering a hyperinflationary environment in the country.

Analysts say it his endorsement of Midzi’s mines nationalisation programme that is likely to upset Zimbabwe’s already struggling economy, which Mugabe said would grow by 2% this year after falling by a cumulative 35% over the past six years.

His endorsement comes despite pressure by cabinet members to censure Midzi, whose statement has created investor fears in the country.

“We said we want 50-50%, or 51% in favour of Zimbabweans or the state and 49% in favour of the investors,” said Mugabe in his Independence Day speech on Tuesday.

“The depleting resources, non-renewable resources, are ours in the first place. You as the investor will get a reward, yes, but that reward should be balanced by what we also keep for ourselves,” Mugabe said.

Analysts said his statement was an endorsement of Midzi’s proposal which caused a massive mining sector panic.

Apart from the slight difference in stake allocation, the Mugabe statement and Midzi’s proposal amount to nationalisation of mines.

Mugabe made the statement this week despite assurances to Impala Platinum representatives that Midzi’s statement was simply a working document and that government had not yet made a decision on the issue.

Mugabe met Implats officials who had come into the country last month to seek clarification on the policy.

Former Shabani Mashava Mines owner Mutumwa Mawere said Mugabe’s statements are part of a plan hatched two years ago when his empire was taken over by the government.

“There is everything sinister and dangerous about the whole policy. The government already controls mines through the RBZ and the Minerals Marketing Corporation,” Mawere said.

“It will scare away investors.”

The move immediately knocked down shares of South African companies with mining interests in Zimbabwe.

Financial news agency Bloomberg reported yesterday that share prices of Impala Platinum Holdings (Implats) and Anglo Platinum (Angloplat) fell on Wednesday on the back of Mugabe’s announcement that he backed the mines takeovers.

Implats subsidiary Zimbabwe Platinum Mines owns a mine in Zimbabwe and most of the country’s known platinum reserves.

Angloplat plans to develop the Unki platinum mine in the country.

Implats, the world’s second-largest platinum company, dropped R27 or 2,4% to R1110 by mid-afternoon.

Angloplat, the world’s biggest producer, declined R11,85 or 2% to R587,” Bloomberg reported.

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