Shamu Contradicts Mugabe on Zimplats

IF the South African-owned platinum mining company, Zimplats, had thought it had found new friends in government when President Robert Mugabe showered it with praise last week it must have been shocked at the weekend when the opposite was dished out by a government minister.

Zimplats must be wondering what triggered a tirade against the company for what Media, Information and Publicity minister Webster Shamu said was its “self-centred” approach to business.
The outburst from Shamu came two days after Mugabe commissioned the Zimplats Ngezi expansion programme where he praised the South African-owned company for complementing government development goals through projects “outside the realm of mining”.
In an apparent disagreement with his boss, Shamu criticised Zimplats for what he described as its “self-centeredness”. 
He was speaking at the burial of Chief Chivero, whose chieftainship oversees the platinum-endowed Ngezi area.
In a news report by the state broadcaster, ZBC, Shamu lashed out at the mining group for not honouring chief Chivero. 
The Chegutu East Zanu PF MP said the late traditional chief had died “without anything to show for large quantities of platinum ore that is being mined by Zimplats in his area”.
He added that Zimplats should have tarred the road to the chief’s homestead.
According to ZBC, Mhondoro MP Bright Matonga together with traditional chiefs petitioned Zimplats management earlier this year over their employment policies which they alleged were unfavourable to locals.
However, last Thursday Mugabe said Zimplats’ operations and social corporate responsibility were a model for the country.
Mugabe summed up the investment prospects by saying: “It is pleasing to note that despite the economic challenges which have largely been forced on our country through illegal sanctions, you have committed yourselves to completing this major investment for the furtherance of your business and the sustenance of our economy.”
He went further to say: “I have no doubt that the achievements you have made are of great benefit for the future of both your operations and that of the local community, and ultimately, the well-being of our country’s population.
“The strides that you have made in assisting government to invest in infrastructural development will go a long way in creating a conducive environment for those businessmen who may wish to set up their operations in this area.”
So what could have triggered this backlash against a company that is widely regarded as the largest investor in recent years? Could Shamu’s fury have been set off by Impala Platinum (Implats) Holdings chief executive, David Brown’s criticism of government’s half hearted commitment to investment policies.
In a frank speech at the commissioning of the programme, Brown warned that government could lose more foreign direct investment due to lethargic bureaucratic inertia in fulfilling mining agreements. The company signed two agreements — the Framework of Agreement and the Release of Ground Agreement which outlined ground rules for operations.
“It is important to stress Your Excellency that as investors our confidence to embark on such a significant investment, particularly at a time when other investors choose other destinations, was premised on the agreements referred to earlier,” Brown said. 
Zimplats, a subsidiary of Implats, invested in Zimbabwe’s platinum deposits –– third largest after South Africa and Russia — when leading mining group BHP ceased operations 10 years ago after citing viability problems.
“Speaking as an investor I would like to stress the importance of adherence by both parties to the letter and spirit of all agreements.”
Government, Brown added, is yet to resolve obligations under the Framework of Agreement signed in 2001. The Zimbabwe Investment Authority during the inaugural Investment Conference also alluded to government’s “reluctance to fully honour agreements” which could  constrain growth of the mining company.
Subsequent to Mugabe’s first visit to the mine in 2006, negotiations for a working partnership for the exploitations of platinum group metals on the Great Dyke were successfully concluded.
This has resulted in Zimplats offering a third of its claims to government, thus creating a diversity of investors in platinum mining. Government in return promised a favourable taxation incentive among other enabling conditions.
The future of the automobile industry, currently dogged by the financial crisis, Brown said, could determine the prices of metals on the world market.
Implats has over the last eight years injected US$600 million in Zimbabwe creating 5 000 jobs. The mining company also funded a 132Kv power line to complement the widely politicised government rural electrification programme.
According to company officials, Zimplats constructed the Ngezi road in a “record time” and funded the fibre optic switching equipment for state-owned telecommunication company TelOne, spurring development in the area.
These impressive investments benefiting the local economy are what Shamu calls “self-centredness” because they didn’t result in
a road to the chief’s home. Crude populism, it seems, trumps national benefit!
On the controversial indigenisation law, Brown said that there was need to amend the law to “take into account” the concerns of the investors while allowing for “meaningful indigenous participation” in the economy.
Foreign investors have expressed concern over the “empowerment” which law which makes them surrender 51% stake of the business venture to locals.

Bernard Mpofu

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