AFRICAN Rainbow Minerals (ARM), a mining concern owned by South African billionaire Patrice Motsepe, has registered a company in Zimbabwe to scout for investment opportunities in coal and platinum amid reports that it intends to invest US$300 million.
This comes as ARM in partnership with a Brazilian mining company, Vale, announced this week plans to commit US$300 million in investments in Zimbabwe.
Motsepe was in Harare last month leading a 22-member South African business delegation on an exploratory mission for possible investments.
ARMâ€™s business development director Dan Simelane was quoted by the South African media saying the company would invest in Zimbabwe.
â€œWe are prepared to invest in Zimbabweâ€™s mining sector and we are willing to inject not less than US$300m for mining activities as soon as a consensus with the ministry (of mines) is reached,â€ said Simelane.
Businessdigest yesterday could not ascertain the operative name of the company in Zimbabwe, but indications were that it would trade as African Rainbow Minerals-Zimbabwe.
The entry of ARM in local mining is expected to energise the sector, which has struggled to attract new investment.
Despite being the second largest platimun producer in the world after South Africa, Zimbabweâ€™s vast deposits remain largely untapped.
ARM joins a growing list of international mining firms from Europe, Russia and China eyeing the countryâ€™s rich mineral resources.
The inclusive government in its Short-Term Emergency Recovery Programme identified mining as one of the key sectors that investors would be encouraged to enter either in partnership with local firms or by starting greenfield projects.
ARM chairman Motsepe on Monday said his company would cut capital spending from a planned US$1,3 billion to US$900 million by 2011.
He said the firm had not terminated any capital projects, but rescheduled expenditure.
The cut in capital spending by 31%, according to ARM, is aimed at conserving cash in light of the fall in commodity prices and tight credit market conditions.
Motsepe said the group would continue to expand and it was looking at acquisitions, including companies in â€œextremeâ€ financial distress.
In the region, ARM has operations in the Democratic Republic of the Congo, Namibia and Zambia.
The South African business delegation from Business Unity South Africa Motsepe lead last month said it had â€œfrank discussionsâ€ with Zimbabwe authorities, but stressed that â€œthe rules of investment should remain in placeâ€.
However, last yearâ€™s enactment of an empowerment law seeking to transfer control of foreign firms to locals had unnerved foreign investors.
The inclusive government has said that it would reform the mining sector by establishing an institution that is mandated to superintend exploration issues and compile a database on the quality and quantity of the countryâ€™s mineral resources.
The Sterp would, therefore, oversee the formulation of an exploration, registration and extraction mining policy that will form the basis for a new, comprehensive mining sector legislation and distinctly separate extraction policies and strategies.
BY NQOBILE BHEBHE