HomeBusiness DigestGovt refuses to pay for mining shares

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Indigenisation and Economic Empowerment minister Kasukuwere told the Zimbabwe Independent  government was currently working on means of ensuring that the state does not, for instance, pay for equity in platinum mines it has targeted for indigenisation such as Zimplats and Mimosa, despite initially promising that there would be an exchange of cash for shares. Implats is expecting an average of US$500 million for its 87% equity in Zimplats.

“We will not pay for the resources,” said Kasukuwere. “This will apply to all companies and is not just confined to platinum mines. We are converting mineral resources in the ground in exchange for equity in mines. Where we are going to have shareholding, we are not going to pay,” he said.

Kasukuwere’s remarks come shortly after government sealed a deal with Implats to buy a 51% stake in Zimplats recently. Well-placed government sources said this week  government was already in the process of doing a due diligence exercise into Zimplats to determine the value of the mine.

This, the sources said, would help government when it quantifies the platinum resources in the ground at Zimplats. While government has virtually concluded its take-over of Zimplats, other platinum mines operating in Zimbabwe, Mimosa and Unki, are also under pressure to accept a Zimplats expropriation model whereby a 31% stake would be housed under or  sold to the bankrupt National Indigenisation and Economic Empowerment Fund (NIEEF), 10%ceded to a community trust and another 10% to workers through an employee share option scheme.

Critics fear the government will run down the mines in much the same way its parastatal, the Zimbabwe Mining Development Corporation (ZMDC), presided over the demise of mines under its ambit such as Mhangura Copper Mines and Kamativi (tin) Mines. ZMDC was only resuscitated after the discovery of diamonds at Chiadzwa in Marange.

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