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Mining sector makes empowerment proposals

THE Zimbabwe Chamber of Mines says indigenous investors in the sector should hold a minimum of 15% in foreign-owned mines with the balance to make up to 51% being made up of equity equivalents.

Addressing journalists on Wednesday in the capital, the chamber president Victor Gapare said they had submitted a position paper to the ministry regarding indigenisation of mining companies.
“It varies as far as equity is concerned. The position that we put together is that indigenous people should hold a minimum of 15%, but it can be any percentage depending on negotiations,” said Gapare when announcing the dates for the chambers AGM.
The 71st annual general meeting of the Chamber of Mines will be held in Victoria Falls from May 27 -29.
The Indigenisation and Economic Empowerment Act requires foreign firms to cede at least 51% shareholding to locals.
Gapare said the equity portions will be paid for and that the timetable for achieving indigenisation will require meeting the equity and equity equivalent portions concurrently.
Gapare said there was a provision that the 51% can be lower taking into consideration factors such as skills development, procurement procedures and social responsibility.
In its position paper, the chamber proposed that the compliance period be extended to 10 years for those seeking a controlling shareholding.
The mines body said 5%-15% shareholding should be achieved in three years, 15 to 30% in seven years and 15 to 51% in 10 years.
“It is a provisional position because the chamber will have to consult with government. We are saying we do not have to focus on 51%. It can be any percentage depending on the negotiations with government. The chamber will not dictate the percentage,” Gapare said.
“We have extended invitation to his Excellency, the president, the prime minister and several government minister and permanent secretaries,” he said.
The theme for this year’s AGM is “Rebuilding the mining industry for sustainable growth, development and empowerment”.
“The mining industry in Zimbabwe is very topical and there are various perspectives. There is unanimity however that mining is the key sector that can give impetus to the much desired economic turnaround,” Gapare said.
Mining houses have contended that the indigenisation and empowerment legislation in its current form negates empowerment of locals and discourages foreign investment. Miners are on record saying there was no way Zimbabweans under the current state of affairs can afford to acquire equity to the extent of 51% for cash and still be able to respond to requirements for capitalisation of the companies.
“Expenditure on qualifying social and infrastructure shall be expressed as a percentage of revenue in any particular year, and multiplied by a revenue-to-equity conversion factor to give the percentage contribution towards that company’s empowerment score for the year,” said Gapare.

Paul Nyakazeya

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